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This guidance note details property allowance which means that the first £1,000 of gross property income is exempt from income tax under certain conditions.

The £1,000 allowances for property is separate to the trading allowance, for full details of the trading allowance, see the Trading allowance guidance note. The allowances are only available to individuals, and an individual may receive both types of allowances.

The property allowance works in a similar way to rent-a-room relief, in that for the property allowance the first £1,000 of gross property income is exempt from income tax.

If the income exceeds £1,000, the taxpayer has a choice of:

1. •

   deducting the £1,000 property allowance from their gross income and being taxable on the excess, or

2. •

   deducting allowable expenses from gross property income in the normal way

The property allowance is of most benefit to ad hoc landlords, such as those letting property through sites such as Airbnb, although it is worth considering whether rent-a-room relief applies as the relief