Glossary · UK

What is Section 24 (Mortgage Interest Relief)?

Rule limiting buy-to-let landlords' mortgage interest relief to a 20% basic-rate tax credit.

Full Definition

Section 24 of the Finance Act 2015 removed buy-to-let mortgage interest as a deductible expense for individual landlords. Phased in from 2017/18 and fully in force since 2020/21, landlords now declare full rental income, then receive a 20% basic-rate tax credit on finance costs. Higher- and additional-rate taxpayers therefore pay tax on income that has already gone to the lender. The change pushed many leveraged landlords into higher tax brackets or losses and accelerated incorporation, since limited companies still deduct interest as a normal business expense. Furnished holiday lets used to be exempt, but that regime ends on 6 April 2025.