Answers · UK 2025/26
Can landlords claim mortgage interest tax relief in the UK?
No — full mortgage interest relief was phased out for individual UK landlords by April 2020 (Section 24 of the Finance Act 2015). Instead you get a 20% tax credit on mortgage interest. Higher-rate landlords lose out: the credit equals basic rate even if you pay 40%.
Full answer
The "Section 24" tax change was phased in from 2017 and fully implemented by April 2020 for UK individual landlords (does not apply to limited companies). Previously, mortgage interest was a deductible expense, reducing taxable rental profit. Now: mortgage interest is no longer deductible from rental income. Instead, you get a basic-rate (20%) tax credit on the interest amount. Worked example: £20,000 gross rent, £8,000 mortgage interest, £2,000 other expenses. Pre-2017: taxable rent £10,000, tax at 40% = £4,000. Post-2020: taxable rent £18,000 (£20k − £2k expenses, no interest deduction), tax at 40% = £7,200, less 20% × £8,000 interest credit = £1,600, net £5,600. Higher-rate landlord pays £1,600 more tax per year. Limited company landlords still get full interest deductibility, which is why incorporation has become popular — but transfer triggers SDLT and CGT.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.