By Christian Koch Making Tax Digital How accountants can support their landlord clients 18 Jun 2026 The new Renters’ Rights Act, shrinking tax reliefs and MTD are reshaping the property landscape. Here’s how accountants can help landlord clients navigate the challenges ahead. When the Renters’ Rights Act came into force last month, it marked one of the most significant shifts in England’s residential property market in decades. The landmark legislation – designed to strengthen protections for the 11 million people renting their homes – arrives at a difficult time for landlords, who are already grappling with higher interest rates, reduced tax reliefs, plus other costs. From cash flow management to tax structuring, here’s how to support your landlord clients during this financially challenging time. The Renters’ Rights Act, explained The Renters’ Rights Act was introduced in May, giving more rights to tenants in the private rented sector. The legislation abolishes section 21 of the Housing Act, which previously allowed landlords to evict tenants with only two months’ notice. The reforms are seen as long-overdue after years of reports about tenants paying over-the-odds for cramped, dirty homes or being unexpectedly forced out for little reason. Key measures Landlords must now have a legal reason to evict tenants. Tenancies will no longer be fixed-term, meaning tenants can remain in their homes until they choose to leave. Rent increases are limited to once a year. Rental bidding wars are banned. New tenant rights including no discrimination on benefits or children plus the right to request pets. Tenants can challenge any ‘unreasonable’ rent increases at a tribunal. If landlords fail to comply, they may face hefty legal penalties including fines of up to £40,000, rent repayment orders covering up to two years’ rent and criminal prosecution for serious breaches. Implications for landlords For England’s 2.3 million private landlords, the reforms will mean much more than following new rules and regulations. For a start, their income is set to become even more irregular. Costs Landlords’ financial pressures have been mounting for some time. Higher interest rates (around 80-85% of buy-to-let mortgages are interest-only) have left many with wafer-thin margins and squeezed profits. Indeed, around half (52%) of landlords earn less than £10,000 in profit annually from their properties according to HMRC research. Meanwhile, requirements to upgrade rental homes to an energy performance certificate rating of C by 2030 means many property owners are forking out for expensive renovations. Landlords now pay an extra stamp surcharge of 5% on the purchase of rental homes, while the tax-free allowance for capital gains tax has been reduced from £12,300 to £3,000. Compliance costs are also expected to rise. A new landlord database is set to be ushered in during 2026-27 which will incur an annual registration fee, alongside other new paperwork. Looking ahead, the Renters’ Rights Act is set to enforce Awaab’s law and the decent homes standard during the 2030s. Awaab’s law will require landlords to repair dangerous issues such as damp and mould, while the decent homes standard will require properties to be equipped with facilities such as noise insulation and child-resistant window restrictors. Landlords may need to begin budgeting for these changes in the next few years. Irregular income Because tenancies are no longer fixed-term, landlords can no longer expect guaranteed rental income projections. Clients may wish to build a larger cash buffer or rainy-day fund, especially as upfront payments become less frequent and eviction processes take longer. The clients most affected by the Renters’ Rights Act are likely to be higher-rate taxpayers, landlords with large mortgages, or those relying on rental income as their main earnings. Some landlords are already exiting the market by selling their properties – perhaps fearing the blow to their finances. How accountants can help Given this income volatility, accountants should focus on advising landlords on their budgets and cash flow forecasting, rather than tax planning or accrual-based forecasting.Forecasts will also need to be based on more cautious occupancy assumptions, while any rent-growth estimations may need to be moderated. Accountants should also prepare to give guidance on capital gains tax planning, private residence relief (PRR) and even retirement strategies. What tax reliefs are available to landlords? Tax policies are also becoming less favourable for landlords. In her budget last November, Chancellor Rachel Reeves increased the tax on property income by two percentage points. This means: Basic-rate taxpayers now pay 22% on any income they receive from a rented property. Higher-rate taxpayers will pay 42%. Additional-rate taxpayers pay 47%. At the same time, tax benefits are in short supply. Until 2020, the mortgage interest tax relief allowed landlords to reduce overheads by deducting mortgage expenses from their rental income. Instead, landlords now receive a 20% tax relief on their buy-to-let mortgage interest – much lower than the 40% and 45% deductions they enjoyed through the previous system. Despite this, landlords can claim for expenses including maintenance/repair costs (eg replacing a broken boiler), bills and insurance (water rates, council tax and electricity), professional fees (letting agency and management fees, and yes, your accountant fees too), plus safety checks. Check out HMRC’s list of allowable expenses here. How is Making Tax Digital impacting landlords? The rollout of Making Tax Digital (MTD) means some landlords need to be aware of new regulations. Clients earning more than £50,000 in 2024-25 should have already started the process of submitting quarterly submissions (the first quarterly submission deadline is 7 August 2026). Further MTD thresholds apply in stages: From April 2027: landlords earning more than £30,000. From April 2028: landlords earning more than £20,000. For more information, check Looking Ahead: Making Tax Digital timelines. Small-scale landlords who earn up to £1,000 from renting out property, or up to £7,500 a year under the ‘rent-a-room’ scheme won’t need to declare this on their tax returns. With eight in ten landlords “worried” about MTD, according to a recent survey by rental management app August, accountants should raise awareness through emails and social media or even offer one-on-one sessions for nervous clients. In conclusion In short, property businesses will need to adopt more cautious forecasting. Accountants can help clients identify risks by reviewing rental yields, mortgage arrangements, maintenance expenses or changing energy providers. Meanwhile, by moving their properties into a limited company structure, landlords can pay corporation tax on rental profits instead of personal income tax. Christian Koch is an award-winning journalist/editor who has written for the Evening Standard, Sunday Times, Guardian, Telegraph, The Independent, Q, The Face and Metro. He's also written about business for Accounting Technician, 20 and Director, where he is contributing editor.