Section 24 Mortgage Interest Relief Calculator for Landlords
Calculate the impact of Section 24 on your rental profits. Landlords can only claim a 20% tax credit on mortgage interest, not full deduction.
Section 24 Rental Profit Calculator
Frequently Asked Questions
What is Section 24?
Section 24 of the Finance (No. 2) Act 2015 restricts the deduction of mortgage interest for individual landlords. Since 2020/21, only a 20% basic rate tax credit is available instead of a full deduction.
Who does Section 24 affect?
Individual landlords who own property in their personal name and have buy-to-let mortgages. Limited companies are NOT affected — they can still deduct mortgage interest in full.
Does Section 24 apply to all landlords?
No. It applies to individuals and partnerships with residential letting income. Commercial property landlords and those with no mortgage are unaffected.
How does the 20% tax credit work?
You pay tax on your full rental income minus other expenses (not mortgage interest), then subtract a 20% credit equal to 20% of your mortgage interest paid.
Should I incorporate to avoid Section 24?
Some landlords move property to a limited company, which can still deduct mortgage interest. However, incorporation has its own costs and tax implications — get advice from an accountant.
What counts as allowable expenses under Section 24?
Repairs and maintenance, insurance, letting agent fees, council tax, service charges, professional fees. Mortgage interest now gives only a 20% credit.
Does Section 24 affect basic rate taxpayers?
Basic rate taxpayers are largely unaffected because their tax credit (20%) equals their marginal rate. Higher and additional rate taxpayers pay significantly more.
Can I claim finance costs on a limited company buy-to-let?
Yes, limited companies can still deduct all mortgage interest as a business expense. Corporation tax applies at 25% (for profits over £250,000 from 2023).
Does Section 24 affect furnished holiday lets?
No — furnished holiday lets (FHL) are treated as a trade and are exempt from Section 24 restrictions. However, the FHL regime ended April 2025.
What was the phased introduction of Section 24?
Section 24 was phased in from 2017/18 to 2020/21. From April 2020, 100% of mortgage interest receives only the 20% credit — no phase-in relief remains.
Will Section 24 be reversed?
As of 2026 there are no government plans to reverse Section 24. It remains fully in effect.
Is rental income from HMOs also affected?
Yes, if you own the HMO personally with a mortgage, Section 24 applies regardless of whether it's a standard let or HMO.