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Most buy-to-let projections count the rent and the mortgage and stop there. The costs that turn a profitable-looking deal into a loss are the ones in between: purchase taxes, compliance certificates, agent fees with VAT, voids, maintenance, and a growing list of new charges under the Renters’ Rights Act and Making Tax Digital. This guide lists 15 costs to budget for in 2026/27 and what each typically involves.
Key takeaways
- Stamp duty on a buy-to-let includes a 5% surcharge on the whole price.
- New costs are arriving: a £65 annual fee per property for the landlord register, a landlord ombudsman, and quarterly digital tax reporting.
- Agent fees are usually quoted before VAT, so add 20%.
- Budget for voids, maintenance and EPC upgrades, not just the mortgage.
- From April 2027, tax on property income rises to 24%, 44% and 49%.
Buying costs
1. Stamp duty with the 5% surcharge
Buying an additional residential property in England means paying stamp duty at the standard rates plus a 5% surcharge on the whole price. On a £250,000 purchase that is £15,000. Use our buy-to-let stamp duty calculator to check your figure.
2. Mortgage fees
Buy-to-let products often carry arrangement fees of a few thousand pounds or a percentage of the loan, plus valuation and broker fees. Compare the total cost over the fixed period, not just the rate, and check early repayment charges if you might sell or refinance.
3. Legal and survey fees
Conveyancing, searches, Land Registry fees and a survey add a few thousand pounds. Leasehold flats cost more because of lease reviews and management packs.
Running costs
4. Letting agent fees plus VAT
| Service | What it covers | Typical cost |
|---|---|---|
| Tenant-find only | Marketing, viewings, referencing | Often a fixed fee or several weeks’ rent |
| Rent collection | Tenant-find plus collecting rent and chasing arrears | A percentage of the monthly rent |
| Full management | Everything, including repairs and inspections | A higher percentage of the monthly rent |
Fees are usually quoted excluding VAT. Since 2019 you cannot pass letting fees on to tenants. See the pros and cons of using a letting agent.
5. Safety certificates
An annual gas safety check, an electrical inspection at least every five years, smoke and CO alarms, a legionella risk assessment, and an EPC every ten years. Individually small, together they add up every year.
6. Landlord insurance
Buildings (unless leasehold), liability, loss of rent, and optional rent guarantee and legal expenses cover. See our landlord insurance guide.
7. Maintenance and repairs
Boiler services, gutters, decoration between tenancies, and the emergency that always comes at the worst moment. A common rule of thumb is to set aside 10 to 15% of the rent. See our maintenance checklist.
8. Service charge and ground rent
For leasehold flats, service charges can rise sharply after major works or insurance renewals. Ask for the last three years’ accounts and any planned works before you buy.
9. Voids
Even a good property is empty for a few weeks between tenants, and you usually pay council tax and utilities while it is. Many investors budget for at least one month empty a year. See how to reduce void periods.
New and rising costs in 2026 and 2027
£65
a year per property for the landlord register
24%
basic rate on property income from April 2027
4×
quarterly digital tax updates a year under MTD
£10,000
maximum EPC C upgrade spend per property by 2030
10. Landlord registration
Every private landlord in England must register each property on the new government database, with a £65 annual fee per property. Registration opens region by region from 15 December 2026, and all landlords must be registered by 15 November 2027. See our PRS database registration guide.
11. Landlord ombudsman membership
Landlords will have to join a redress scheme run by the Housing Ombudsman Service. The fee and start date have not yet been set; see our report on the new ombudsman.
12. Making Tax Digital software
Landlords and sole traders with combined qualifying income over £50,000 have had to keep digital records and send quarterly updates since April 2026. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028. You will need compatible software, and possibly more accountancy time. See our Making Tax Digital guide for landlords.
13. Higher income tax on rent
From 6 April 2027, individual landlords in England, Wales and Northern Ireland will pay tax on property income at 24%, 44% and 49%, following the Autumn Budget 2026. Mortgage interest relief remains a basic-rate credit. See what the Budget means for landlords.
14. EPC upgrades
All rental homes are due to need EPC C by 1 October 2030, with a spending cap of £10,000 per property. Budget for insulation, heating or windows now rather than all at once. See our EPC requirements guide.
15. Licensing, legal and selling costs
Selective or HMO licensing can cost several hundred pounds or more per property; see our selective licensing fees by council. Possession claims now run through Section 8 and the courts, which costs more than the old Section 21 route. And when you sell, capital gains tax at 18% or 24% is due within 60 days. See our capital gains tax guide.
Putting it together
Before you buy, or when you review a property you already own, put every cost above into a cash-flow model alongside the rent and mortgage. Many landlords who do this for the first time find a property that looked profitable only just breaks even. The Does It Stack? calculator runs a full appraisal, and if you are weighing up whether to keep a property at all, the Sell or Keep? planner compares the options side by side. Most of these running costs are deductible from rental income; see our guide to allowable expenses.
Written by The Landlords Portal Team and updated in November 2026. Applies to England. This is general information, not financial or tax advice.
Frequently asked questions
What are the hidden costs of buy-to-let?
The ones most often missed are the stamp duty surcharge, agent fees plus VAT, voids, maintenance, safety certificates, service charges, and new costs such as the £65 annual landlord registration fee and Making Tax Digital software.
How much should I budget for buy-to-let maintenance?
A common rule of thumb is 10 to 15% of the rent, more for older houses.
How much is the landlord registration fee?
£65 a year per property, with no VAT. All landlords in England must be registered by 15 November 2027.
Excel calculator from Landlords Portal
Does the deal stack after tax?
The Does It Stack? calculator shows your cashflow after stamp duty, Section 24 and running costs, and whether a lender will pass the deal.
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