Rent received is only the starting point
A property can show an attractive advertised yield while leaving little money to spend. Vacancy reduces receipts; operating costs and repairs consume part of what arrives. A mortgage then needs both interest and principal payments, and the tax calculation may recognise only some of those outgoings. Money kept for future bills is still yours, but it is not available for everyday spending.
This comparison separates those layers. Gross yield uses scheduled annual rent and the property price. Net operating yield uses rent after vacancy and running costs, measured against price plus entered purchase costs and initial work. Cash-on-cash return uses the money remaining after financing, estimated tax and reserves, measured against your own cash committed.
Compare a property, rather than national averages
The same price, rent, vacancy, operating costs and financing budget are applied to eight country models. These are hypothetical properties with shared economics. They are not evidence that an equivalent home is available at that price or can achieve that rent in every country.
The tax examples concern an individual residential landlord using the stated local treatment. They do not combine the tax systems as if one person owned all eight properties. Cross-border taxation, tax treaties, company ownership, short-term accommodation and special personal reliefs need separate analysis. Enter only owner-paid costs; exclude tenant reimbursements and refundable deposits from the rent.
Build your rental scenario
The underlined figures are an editable starting example. Purchase costs are an entered provision, not a statutory tax calculation. The annual reserve is additional cash kept for future bills; avoid counting the same repair budget in both costs and the reserve.
Inspect the result for one market
Choose a market to inspect its monthly cash result. The selected market appears first in the chart; switching markets preserves your property inputs and every market’s tax settings.
United Kingdom
After costs, debt payments, estimated tax and the reserve, €126.13 remains per month on an annual-average basis. Actual receipts and bills will arrive at different times.
What remains each month
Same property scenario · €
Dark bars show cash remaining; red bars and negative amounts show the contribution needed. All eight use the same scale and property inputs. A dash means the selected local model or regime cannot support that scenario. A positive cash result does not establish that the property is affordable to buy or that its rent is achievable.
Tax assumptions for United Kingdom
These settings are examples, not eligibility checks. Depreciation assumes an eligible building base with sufficient unused allowance. For other facts, deductions or a different ownership structure, use the country guide.
Of €21,600.00 scheduled rent, €1,775.34 is lost to the entered vacancy. Management and owner-paid costs leave €15,436.93 before debt payments, tax and reserves. Gross yield divides scheduled rent by price; net operating yield divides this operating result by price, purchase costs and initial work.
The €180,000.00 loan has €11,401.28 of payments over twelve months: €7,122.11 interest and €4,279.16 principal. Principal reduces debt and uses cash; it is not a rental tax deduction.
The €1,513.54 annual cash balance follows operating income less debt payments, €1,922.11 of attributed tax and €600.00 kept as a reserve. Own cash committed is €144,000.00: the price contribution, entered purchase-cost provision and initial work. The cash-on-cash return uses that own-cash amount, rather than the whole property price.
Individual residential landlord, England, Wales and Northern Ireland Income Tax rules for 2026/27. Other taxable income is €45,000.00 a year. Rental profit before finance relief is €15,436.93. The additional tax before the finance-cost reduction is €3,346.54; the applied reduction is €1,424.42. The attributed tax can be negative if the reduction also offsets tax on other income.
An advertised monthly rent of €1,583.67 covers the entered costs, debt payments, tax and reserve at this vacancy level. This is a cost-covering threshold, not evidence that tenants will pay it. The rent is rounded up to the cent; no extra monthly income target is included.
Principal, reserves and depreciation do different jobs
Principal repayment uses cash while reducing debt. Depreciation is an accounting allowance that may reduce a tax base without paying a bill. The annual reserve remains liquid until spent, but is withheld from the income available here. None is a substitute for another: reducing a tax bill does not make a mortgage payment disappear, and removing a reserve does not remove future repair risk.
The initial work and purchase provision are counted once in own cash committed. They are not deducted again from the annual cash result. The model treats the entered recurring costs as eligible operating expenses where the selected tax system permits them, with the Swiss non-deductible share entered separately. Improvements, private use, capitalised repairs and expenses already reimbursed by a tenant require different treatment.
Use break-even rent to test the plan
A cost-covering rent is a minimum for the chosen assumptions. Compare it with credible local lettings, not just asking prices. If it is higher than the rent you can reasonably collect, revisit the purchase price, financing, costs or reserve before relying on the investment for income. A full year of vacancy or a fee consuming every receipt can make a cost-covering rent impossible within the scenario.
Cash-on-cash return can increase with borrowing even while the monthly contribution becomes less comfortable. It can also be undefined when no own cash is committed. Read it alongside the signed monthly result, the debt being repaid and the costs omitted from your own estimate.
Methodology
The linked country models calculate one full operating year. Shared euro inputs are converted internally where a local model needs local monetary thresholds, then all results return to €. Mortgage payments use the common rate and term; Germany translates that budget to initial repayment, while Switzerland uses its annual opening-debt convention. France adds the entered borrower insurance. Break-even rent searches for non-negative cash after the same costs, tax and reserve. Conversions are fixed planning assumptions; no live rates, currency forecast, property appreciation or sale is included.
- HMRC — residential finance-cost relief · UK Income Tax · Scottish Income Tax
- Poland Ministry of Finance — private rental tax
- Spain — rental expenses and reductions · Vacancy imputation
- France — unfurnished letting · Social levies
- Germany — building depreciation · Deductible costs
- Agenzia delle Entrate — residential rental taxation · Italian Parliament — IRPEF rates
- Geneva — private-property deductions · Swiss Federal Finance Department — reform commencement
- IRS — residential rental income, costs and depreciation
Frequently asked questions
Does this show the best country for a rental investment?
No. It compares the same entered price, rent and costs under stated local tax examples. It does not establish achievable rents, local property values, market risk, tenant demand or your eligibility to buy and borrow.
Why can a property make a profit but need monthly contributions?
Taxable income can exclude principal repayments and a retained cash reserve, while depreciation can reduce tax without using cash. Cash available and taxable income therefore answer different questions.
Are the tax profiles national averages?
No. Marginal rates, eligible regimes, building bases and cadastral assumptions are editable examples. Replace them with your circumstances and check deductions with the country guide.
Does the mortgage term apply to Germany and Switzerland?
The same term sets a common annual repayment budget. Germany translates it into an initial repayment percentage; Switzerland allocates that annual budget between opening-debt interest and direct principal repayment. Neither conversion is a mortgage offer.
Does zero rent hide the costs?
No. The chart explains that no rental income is collected, while the selected market’s sheets retain costs, mortgage payments and the resulting cash contribution.
Why does a tax loss not always produce a refund?
Relief depends on national rules, other income, limits and timing. The comparison does not assume an immediate refund for losses; the UK finance-cost reduction follows its separate statutory caps and may offset tax on other income.
What does break-even rent mean here?
It is the monthly advertised rent needed to cover operating costs, financing payments, estimated tax and the entered reserve at the selected vacancy level. It is not a local market-rent forecast.
Why is everything displayed in euros?
A single display currency makes amounts comparable. Non-euro country models apply local monetary thresholds using fixed internal planning conversions. These are not live quotes or forecasts, and no currency gain or loss is modelled.
Is this a first-year tax return?
No. It represents a full operating year with a new loan, using the linked country models. Exact acquisition-year depreciation, timing, personal allowances beyond the stated model, loss carryforwards and tax-return rounding require a separate calculation.