Section 24 of the Finance Act 2015 phased out the ability of individual landlords to deduct mortgage interest from rental income before tax. Instead you pay tax on the full rental profit and get a flat 20% tax credit on your finance costs. Basic-rate taxpayers are usually unaffected; higher and additional-rate taxpayers pay more.

Does Section 24 affect basic-rate taxpayers?

Generally no: the 20% credit matches the 20% basic rate, so the restriction is neutral. The catch is that adding the full rental profit to your income can tip you into the higher-rate band, which the calculator accounts for.

Does Section 24 apply to limited companies?

No. Section 24 only applies to individual landlords. Properties held in a limited company can still deduct mortgage interest as a business expense, which is one reason many landlords incorporate, though incorporation has its own costs and tax consequences. Always take advice.

Section 24 of the Finance Act 2015 phased out the ability of individual landlords to deduct mortgage interest from rental income before tax. Instead you pay tax on the full rental profit and get a flat 20% tax credit on your finance costs. Basic-rate taxpayers are usually unaffected; higher and additional-rate taxpayers pay more.

Does Section 24 affect basic-rate taxpayers?

Generally no: the 20% credit matches the 20% basic rate, so the restriction is neutral. The catch is that adding the full rental profit to your income can tip you into the higher-rate band, which the calculator accounts for.

Does Section 24 apply to limited companies?

No. Section 24 only applies to individual landlords. Properties held in a limited company can still deduct mortgage interest as a business expense, which is one reason many landlords incorporate, though incorporation has its own costs and tax consequences. Always take advice.

All tools

What Section 24 really costs your rental.

See exactly what the mortgage-interest relief restriction does to your tax bill. The tax under Section 24 versus the old rules, the extra it costs you each year, and the profit you actually keep after tax.

2026/27 bands
Old rules vs new
Post-tax profit

What you'll see

The extra tax Section 24 costs you each year
Your tax under the old rules vs the new rules
Post-tax rental profit and effective tax rate
A plain-English read on how hard you are hit

Indicative only. Built from published rules and the figures you enter; we do not guarantee accuracy or completeness, and this is not tax, legal or financial advice. Check with a qualified professional before relying on it. How accurate is this?

Our take

Section 24 bites at the margin, which is where higher-rate landlords live

Since the Finance Act 2015 changes, individual landlords cannot deduct mortgage interest from rental income; they pay tax on the profit before finance costs and receive a 20% tax credit on the interest instead.

For a basic-rate taxpayer that is largely neutral, but adding the full rental profit to your income can push you over the higher-rate threshold, and that is where the unexpected tax comes from.

The common mistake is to take rent minus mortgage and call it profit, so run the calculator with your real income, because your salary decides how much of the rental profit is taxed at 40%.

Homes held in a limited company sit outside Section 24, though moving them in brings its own tax costs, so take advice before changing anything and cost the tax into your next purchase before you offer.

Our opinion, based on the official sources named above: general guidance, not regulated advice and not a forecast. We earn from OfferCheck reports and from introducing sellers to cash buyers, so weigh it with that in mind (see our disclosure). We are not authorised or regulated by the FCA.

Your figures

Enter your year

Annual rental income

£0£100,000

Allowable expenses

£0£50,000

Excluding mortgage interest.

Annual mortgage interest

£0£60,000

Your other income (salary etc., before tax)

£0£200,000

Salary etc. sets your tax band. Basic-rate taxpayers are unaffected by Section 24.

Extra tax from Section 24

£1,400

per year vs the pre-2017 rules

Post-tax profit

£1,600

68% effective tax on rental profit

COSTS YOUSection 24

Section 24 adds £1,400 of tax a year (effective 68% on your rental profit). Still profitable after tax.

Old rules vs Section 24

Your tax bill, compared

The same year, taxed both ways: what the relief restriction adds to your bill.

Pre-tax cash profit£5,000

Tax under old rules£2,000

Tax under Section 24£3,400

20% finance-cost tax credit£1,400

Extra tax from Section 24£1,400

Post-tax profit£1,600

Your marginal tax rate40%

What this means

Section 24 costs you an extra £1,400 in tax a year versus the old rules.
Estimate only: 2026/27 England/NI & Wales bands, individual landlord. Property-income rates announced for April 2027 are not modelled. Verify with an accountant.

Buying another rental?

Section 24 squeezes leveraged landlords. Before you add to the portfolio, check the property's risks and the numbers behind the deal.

Get OfferCheck BMV calculator

This calculator is for guidance only and does not constitute financial, tax, mortgage or investment advice. Figures are estimates, always seek professional advice and verify costs before committing to a purchase.

Section 24: common questions

What is Section 24?: Section 24 of the Finance Act 2015 phased out the ability of individual landlords to deduct mortgage interest from rental income before tax. Instead you pay tax on the full rental profit and get a flat 20% tax credit on your finance costs. Basic-rate taxpayers are usually unaffected; higher and additional-rate taxpayers pay more.
Does Section 24 affect basic-rate taxpayers?: Generally no: the 20% credit matches the 20% basic rate, so the restriction is neutral. The catch is that adding the full rental profit to your income can tip you into the higher-rate band, which the calculator accounts for.
Does Section 24 apply to limited companies?: No. Section 24 only applies to individual landlords. Properties held in a limited company can still deduct mortgage interest as a business expense, which is one reason many landlords incorporate, though incorporation has its own costs and tax consequences. Always take advice.

What Section 24 really costs your rental.

Section 24 bites at the margin, which is where higher-rate landlords live

Enter your year

Your tax bill, compared

Section 24: common questions

Get the full picture before you offer