Discover why property accounting offers accounting firms growth potential ahead of MTD. Learn how to win landlord clients with dedicated services.
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Property accounting is having a moment in the sun. With landlords facing more paperwork, stricter regulations, and now quarterly digital tax submissions, many are reaching out for professional help.
For accountants, this creates an interesting question: is developing property-focused services worth the investment?
With Making Tax Digital (MTD) about to sweep hundreds of thousands of landlords into digital reporting, the opportunity seems obvious. But expanding into any sector requires careful consideration.
The truth is that many landlords have managed perfectly fine with spreadsheets and annualised tax processes for years. MTD is about to change that completely – creating an opportunity for accountants to step in and provide solutions that make property management a powerful tool for growth.
The Current Picture: Why Landlords Need Help
Nearly 3 million private landlords operate across the country, with the majority (57%) owning more than one investment property.
MTD is about to hit a large percentage of landlords using the self-assessment system. From April next year, landlords earning over £50,000 must start filing quarterly digital updates with HMRC. Those earning over £30,000 follow in 2027, with the £20,000 threshold kicking in by 2028.
This affects a huge number of people – around 780,000 in the first wave alone, with nearly a million more joining in 2027. What many don’t realise is that these thresholds apply to gross income, not profits. A landlord with £50,000 in rent but significant mortgage interest and expenses still needs to comply, even if their actual profit is modest.
With MTD, accountants’ role in property accounting will change from a once-a-year engagement to an ongoing process. While an end-of-year Final Declaration still applies, landlords will need to submit quarterly reports, meaning they’ll need to report and reconcile payments periodically throughout the year.
Why the Real Estate Sector Needs Specialists
The bottom line is, landlords who stay in the market will need much more regular support than the annual tax return rush they’re used to. Let’s explore specific pain points and frictions that accountants can address:
Excellent Property Accounting Reveals the Facts
Robust property-by-property tracking reveals property performance across the portfolio.
Considering that just 43% of UK landlords own just one property, with 39.3% managing between 2 and 4 properties and 11.2% managing 5-9 properties, and only a small percentage manage larger portfolios, most landlords are juggling multiple investments.
Each property is its own primarily self-contained ‘unit’ with its own income, expenses, etc — though higher performance in one can often be hedged against lower performance in another, and so on.
Needless to say, the more properties you have to track, the more limited non–property–specific systems become.
Without property-by-property accounting, landlords can’t see which properties generate strong returns and which secretly drain resources. They make decisions based on overall portfolio performance rather than identifying which specific properties deserve more investment or consideration for selling.
Property Tax Rules Are Their Own World
Rental property faces distinct tax treatment and regulatory requirements that are stacking up of late, creating probably the most intricate property regulation and reporting environment in history.
- Stamp Duty Land Tax surcharge increased to 5%: The SDLT surcharge for additional residential properties has risen from 3% to 5%, significantly increasing upfront costs for buy-to-let investors and second-home buyers.
- Nil-rate SDLT threshold reduced to £125,000: The SDLT nil-rate band reverted to £125,000 (down from £250,000), raising tax liabilities on property purchases across much of the market.
- Section 24 restricts mortgage interest relief: Landlords can no longer deduct mortgage interest from rental income; instead, a basic-rate tax credit applies, substantially affecting net returns for many investors.
- Renters’ Rights Bill reforms landlord-tenant rules: The proposed bill includes the abolition of Section 21 “no-fault” evictions, the introduction of open-ended tenancies, and tighter rules on rent increases and tenant discrimination.
- Energy efficiency regulations require costly upgrades: New and upcoming rules push landlords to improve EPC ratings, with many properties needing insulation, heating, or glazing upgrades to comply.
Accountants need to understand not just the individual regulations but also how they interact with each other and the landlord’s overall financial position. Building out your real estate accounting services to protect landlords from rising costs and risks provides a vital, marketable service that is set to increase in demand as they become more stretched in their responsibilities.
Structure Choices Matter Enormously
How landlords hold property – personally, through companies, or in partnerships – dramatically affects their tax situation.
Corporation Tax holds steady, but other factors like the upcoming increase in National Insurance from 13.8% to 15% and the doubled Employment Allowance (£10,500) could create a more efficient setup for landlords, contributing to Section 24 mortgage interest changes, which also favours limited companies.
However, it’s not always clear-cut. Different structures affect:
- How rental income gets taxed
- Whether mortgage interest receives full relief
- Options for extracting profits
- Capital gains treatment upon sale
- Inheritance tax implications for the future
The right structure varies enormously based on portfolio size, personal income, and long-term goals. While incorporation carries advantages, it also carries nuances and risks that property investors need to understand via their accountants.
Property Software Implementation
Generic accounting packages don’t handle rental properties effectively. They lack features for tracking property-specific metrics, tenant information, and maintenance records, and they won’t meet MTD requirements properly.
Property-specific platforms give landlords information they can use for decision-making:
- True yield calculations after ALL expenses
- Property-by-property performance comparisons
- Maintenance cost trends over time
- Tenant payment history and void periods
- MTD-compliant quarterly reporting capability
Accountants who understand property-specific software help landlords both comply with regulations and make smarter decisions about their investments. This expertise will only become more valuable as MTD forces thousands of property owners to update their accounting practices next year.
Property Accounting: Weighing Up the Opportunity
Accountants who serve property clients could find themselves in an enviable position. The sector rewards specialist knowledge with client loyalty, higher fees, and steady referrals that general practice rarely matches. MTD only amplifies these benefits.
Here are some key advantages that make property accounting worth serious consideration:
- Predictable practice income: Property clients consult their accountants year-round rather than just at tax time, smoothing revenue across traditionally quiet months.
- MTD client acquisition boom: The 2026 quarterly reporting deadline will send hundreds of thousands of landlords searching for professional help – many for the first time.
- Premium service potential: Landlords happily pay more for specialists who genuinely understand property tax and can identify legitimate savings.
- Ready-made referral sources: Mortgage brokers, solicitors and estate agents regularly refer clients to accountants who demonstrate property expertise.
- Remarkable client retention: Well-served property clients rarely switch accountants, establishing lasting relationships that build practice value.
Of course, every opportunity brings challenges that require honest assessment. Here are the real considerations for firms expanding into property accounting:
- Tax knowledge investment: Property taxation involves distinct rules that require focused learning and ongoing education.
- Technology adoption: Property accounting demands purpose-built software that handles everything from per-property tracking to tenant management.
- Legislative monitoring: Government property policies shift constantly, requiring attentive tracking of consultation papers and announcements.
- Client expectations: Property clients range from hands-off investors to deeply involved landlords, requiring flexible service models.
- Competitive differentiation: Standing out in the property accounting space requires clear value propositions, not merely basic compliance.
Most pragmatic, forward-thinking accounting firms find these challenges entirely manageable and well worth tackling given the substantial growth potential. The key lies in thoughtful implementation rather than half-hearted dabbling.
How Landlord Studio Can Help You Win The Property Sector
MTD has ushered forth a new wave of accounting tools designed specifically for property, such as Landlord Studio, which supports the new rules while providing a suite of features that drive better property decisions. The software you recommend and the advantages it carries directly reflect on your value propositions and services.
For accountants looking to build stronger relationships with landlord clients, Landlord Studio offers several proven, practical benefits:
- Built for rental properties, not general business: Landlord Studio handles the specific elements of property accounting that standard systems miss, while ensuring full MTD compliance. They offer a free option that makes it easy for clients to get started.
- No more chasing clients for information: The accountant portal lets you see what’s happening with your clients’ properties without endless email chains. You get real-time visibility into their finances, not just a once-a-year data dump.
- Plays nicely with existing systems: If you’re using Xero, Landlord Studio’s integration means you can stick with your current workflows. Your clients get property-specific features while you continue using the tools you’re already comfortable with.
- Covers the practical side of being a landlord: Beyond accounting, the software helps with day-to-day property management – tracking tenants, managing maintenance, and keeping everything compliant.
By introducing clients to platforms such as Landlord Studio well before MTD, you show them you understand the practical challenges of property ownership, not just the tax implications. This creates a different kind of relationship than they might get with other accountants.
Is Property Accounting Right for Your Practice?
Not every accounting firm should pursue property as a specialisation. Success in this niche depends on several factors worth honest assessment.
Here are the key indicators that property accounting might be right for your practice:
- Existing property clients: Firms that already serve some landlords will find the transition smoothest, building on established expertise.
- Technology comfort: Success with property clients requires embracing digital tools and helping clients do the same.
- Growth ambitions: Practices seeking new revenue streams will find property offers substantial expansion potential.
- Advisory inclination: Firms that enjoy consultative work beyond compliance will thrive in property’s complex planning environment.
- Local market dynamics: Areas with high concentrations of rental properties naturally offer more fertile ground for specialisation.
In sum, property represents an ideal growth opportunity – substantial enough to support practice development, but focused enough to develop genuine expertise. The upcoming MTD deadlines create the perfect catalyst for expanding in this direction.
Taking the Next Step with Landlord Studio
Finding the right property accounting software enhances the services accountants can offer landlords now and over the months and years ahead. Landlord Studio stands out with exactly what accounting firms need to serve property clients effectively.
The platform combines property-specific features with MTD compliance, giving landlords better insights while simplifying your work as their accountant. For accountants, the dedicated portal gives you direct access to client data without endless email exchanges, while the Xero connection preserves your existing workflows.
Book a demonstration today to see how Landlord Studio could strengthen your property accounting services. With MTD deadlines approaching, there’s never been a better time to enhance your landlord offering.