What Is Rent-a-Room Relief? (UK 2025/26)

Rent-a-Room Relief lets you earn up to £7,500 per year tax-free from renting out furnished accommodation in your main home. If your rental income stays below this threshold, you do not need to pay any tax on it or report it to HMRC.

How It Works

The relief applies to income from letting furnished rooms in the home you live in — whether to a lodger, short-term guest, or anyone else. The key requirement is that the accommodation must be in your own residence, not a separate property. The £7,500 limit applies per household, not per room. If you share ownership with someone who also receives rental income from the property, you split the £7,500 allowance (£3,750 each).

If You Earn More Than £7,500

If your gross rental income exceeds £7,500, you have two choices. You can deduct the £7,500 as a flat-rate allowance instead of claiming actual expenses. Or you can calculate profit in the normal way by deducting your actual expenses. You should choose whichever method gives you the lower taxable amount.

What It Does Not Cover

Rent-a-Room Relief only applies to your main home. It does not cover separate properties, unfurnished rooms, or commercial letting operations. It also cannot be used alongside the £1,000 property allowance — you must choose one or the other.