He falsely claimed more than £11,200 from the public purse after nominating a home outside London which he neither owned nor lived in as his main residence. He lived in west London.
The barrister and former television producer who became Britain’s first black Conservative peer is the first parliamentarian to be tried and found guilty by a jury over the expenses scandal.
The Labour MPs David Chaytor and Eric Illsley both pleaded guilty.
Taylor, who has not paid back any of the money, is expected to hang on to his seat in the House of Lords.
The 58 year-old, who describes himself as a committed Christian, insisted he was only following advice on expenses from other peers but was found guilty of six counts of false accounting by a majority verdict at Southwark Crown Court.
He was given unconditional bail but faces up to two years in jail.
Outside court, his lawyer Eddie Tang said: “Lord Taylor has devoted 20 years of his life to public service. He is clearly devastated about the jury’s verdict.”
In 2006 and 2007, Taylor received £11,277 in expenses after claiming his main residence was in Oxford and that he had to travel back and forth each time he attended the House of Lords.
The house belonged to his nephew Robert Taylor, who had no idea his uncle had nominated the home he shared with Dr Tristram Wyatt, a fellow at Oxford University.
Mr Taylor said he was “shocked and quite angry” when he discovered that his uncle had been using the two-bedroom terrace property as a cover for his expenses. He said Taylor had only visited twice, never stayed overnight and had no financial claim on the house.
Taylor insisted he had been told he would be “crazy” not to claim for a house outside London, even if he didn’t live there.
He said he had been advised by Lord Colwyn, the deputy speaker of the House of Lords, who was summoned to court to give evidence. Lord Colwyn denied giving such advice and added: “I would not have suggested anything being claimed in the House of Lords that was in any way dishonest.”