Since 2020, landlords can't deduct mortgage interest as a business expense — instead you get a 20% tax credit. See exactly what that costs you versus the old rules.
| Old rules (pre-2020, for comparison) | Section 24 (current) | |
|---|---|---|
| Taxable profit | £0 | £0 |
| Tax at your rate | £0 | £0 |
| Mortgage interest tax credit (20%) | n/a | −£0 |
| Net tax due | £0 | £0 |
Higher and additional-rate taxpayers are hit hardest by Section 24, because the 20% mortgage interest credit is worth proportionally less to them than a full deduction at their own rate would have been. A basic-rate taxpayer gets a credit that roughly matches what they'd have saved under the old rules; a 40% or 45% taxpayer only gets a 20% credit on interest that would previously have been relieved at their higher rate, and can even find themselves pushed into a higher tax band by the way Section 24 inflates taxable profit. This calculator shows the pre-2020 rules purely for comparison — you cannot elect to use them today.
This calculator is illustrative only and does not constitute financial advice. Always confirm figures with a lender, broker or HMRC before making a decision.
Property Pundit UK