Section 24 changed how mortgage interest is treated for landlords who own property personally. Instead of taking it off the rent, you get a tax credit of 20% of the interest, so higher-rate taxpayers often pay more tax.
This calculator works out rental profit, the Section 24 credit and the tax by year from 2025/26 to 2027/28, alongside your other income, and shows the figures for the SA105 boxes.
| Salary | £40,000 |
|---|---|
| Rent less running costs | £17,000 |
| Mortgage interest | £8,000 |
| Tax on rental profit | £10,270 at 20% + £6,730 at 40% = £4,746 |
| Less 20% credit on interest | £1,600 |
| Tax to pay on the rental | £3,146 |
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The rule that stops individual landlords deducting mortgage interest from residential rent. They get a basic-rate tax credit on the interest instead. It doesn’t apply to limited companies.
It can. Because the interest isn’t deducted, your taxable income is higher, which can move part of it into the 40% band or affect things like Child Benefit.
The government has announced that tax rates on property income will rise by 2 percentage points from April 2027, with the finance cost credit rising to match, in England, Wales and Northern Ireland. The calculator includes the years ahead.
Education, not advice. Rules change and depend on your circumstances. Check GOV.UK and speak to a qualified adviser before you act.