4.3%
United Kingdom
Buy-to-let cash flow calculator — cash-on-cash return and IRR after tax
Your return is on the cash you wired — deposit, SDLT and fees — not on the price.
Cash-on-cash return is the number investors actually live with: the cash a property puts in your pocket each year divided by the cash you put in to buy it. This calculator projects a buy-to-let year by year — rent, voids, costs, mortgage, tax — and adds the sale at the end to give an after-tax IRR on your money. Stamp duty, including the 5% surcharge on additional properties, is counted in the cash you invest rather than left in a footnote.
Year 1 costs you £1,349 after tax
After-tax IRR over 10 years including the sale: 4.3%. Cash you put in: £90,500 (SDLT £18,000 included).
£1,601/month
4.20%
1.3%
£0
£143,106
| Year | Rent collected | Interest | Principal | Tax | Cash after tax | Equity |
|---|---|---|---|---|---|---|
| 1 2026/27 | £15,180 | £10,500 | £0 | £2,511 | -£1,349 | £78,400 |
| 2 2027/28 | £15,635 | £10,500 | £0 | £2,681 | -£1,169 | £87,052 |
| 3 2028/29 | £16,104 | £10,500 | £0 | £2,832 | -£960 | £95,964 |
| 4 2029/30 | £16,588 | £10,500 | £0 | £2,988 | -£745 | £105,142 |
| 5 2030/31 | £17,085 | £10,500 | £0 | £3,149 | -£523 | £114,597 |
| 6 2031/32 | £17,598 | £10,500 | £0 | £3,314 | -£295 | £124,335 |
| 7 2032/33 | £18,126 | £10,500 | £0 | £3,485 | -£59 | £134,365 |
| 8 2033/34 | £18,669 | £10,500 | £0 | £3,660 | £183 | £144,696 |
| 9 2034/35 | £19,230 | £10,500 | £0 | £3,841 | £432 | £155,336 |
| 10 2035/36 | £19,806 | £10,500 | £0 | £4,027 | £689 | £166,297 |
5 assumptions in these figures
- Assumption: No rules are published yet for 2029-30 to 2035-36; the 2028-29 rules and thresholds are held constant.
- Assumption: Held at 2026-27 CGT rates.
- Assumption: Held at £3,000.
- Assumption: Property rates held at the 2027-28 levels.
- Assumption: Finance cost relief held at 22%.
Worked example
Buying a £280,000 flat with a £70,000 deposit means paying £18,000 of SDLT and £2,500 of legal and survey fees: £90,500 of your own money in total.
In year one the property collects £15,180, spends £3,518 on letting and running costs and £10,500 on interest. Income tax under Section 24 adds £2,511. That leaves -£1,349 after tax — an after-tax cash-on-cash return of -1.5%.
Over 10 years, with rent and costs rising 3% a year and prices 3% a year, the sale in year 10 releases £143,106 after 2% selling costs, repaying the £210,000 mortgage and £15,665 of capital gains tax. Counting every year's cash and the sale, the after-tax IRR is 4.3%.
The break-even figures answer the forum question "what would it take?": year-one cash flow after tax reaches zero at a rent of £1,601 a month, or a mortgage rate of 4.20%.
How the projection works
Each year the model collects rent less voids, pays the letting agent and running costs, pays the mortgage from a real monthly schedule (interest-only or repayment), and then asks the UK tax engine how much tax the property adds to your bill using the bands, Section 24 relief, losses and carry-forwards for that tax year. Repayment mortgages reduce cash flow by the capital repaid even though capital is not tax-deductible.
At the end of the period the property is sold at the projected price. Capital gains tax is charged at 18% on the part of the gain that fits inside your unused basic-rate band and 24% above it, after the £3,000 annual exempt amount (GOV.UK). SDLT and legal fees you paid are allowable costs, which reduces the gain.
After-tax IRR is the annual rate that makes the value of all those cash flows — your initial outlay, each year's after-tax cash and the net sale proceeds — equal to zero. It is the fairest single number for comparing a property with other uses of the same money.
Stamp duty is part of the investment
A 5% SDLT surcharge applies on top of the standard rates when the purchase means you own more than one residential property (GOV.UK SDLT rates). On the default £280,000 purchase that is £18,000 — money that never earns rent but has to be earned back. Leaving it out of the denominator flatters every cash-on-cash figure you will see.
What this calculator does not include
- Mortgage product fees, broker fees and refurbishment (add them to legal fees if you pay them in cash).
- Rate changes over the mortgage term — the rate you enter applies throughout.
- Tax years after 2027/28 hold the latest enacted rates and thresholds; the assumptions panel lists them.
- Scottish or Welsh purchase taxes (LBTT, LTT) and Scottish income tax.
Questions landlords ask
Is buy-to-let still worth it?
It depends on your tax band, your mortgage rate and how much the price grows — not on the headline yield. In the default example (a £280,000 flat, £70,000 deposit, 5% interest-only, £50,000 salary) the property costs £1,349 a year after tax at first, yet returns 4.3% a year after tax over 10 years once 3% annual price growth and the sale are included. Whether that is "worth it" means comparing it with what the same £90,500 would earn after tax elsewhere, which is what the numbers above let you do with your own figures.
What is a good cash-on-cash return for a buy-to-let?
It depends on what else the money could earn. Compare the after-tax figure with an after-tax return you could get elsewhere — the Hold vs Sell tool does this comparison explicitly.
Why is my cash-on-cash negative when the yield looks fine?
Usually a combination of mortgage interest above the net yield and Section 24 taxing a profit before interest. The year-by-year table shows which one dominates.
Is IRR better than cash-on-cash?
They answer different questions. Cash-on-cash is this year's income on your money; IRR includes growth, the loan paying down and the tax on the sale over the whole period.
Does the calculator include capital gains tax?
Yes, on the sale at the end of the period, at 18%/24% with the annual exempt amount, using your projected income in that year.
Tax rules: UK registry v1.0.0, last reviewed 2026-09-30. Figures in the text use the default inputs above. Sources and method.