Section 24 explained: how landlords get tax relief on mortgage interest

Updated 15 October 2026

For individual residential landlords, mortgage interest and other finance costs aren't deducted from rental profit. You get a basic-rate tax reduction instead: 20% of the lowest of (1) your finance costs plus any brought forward, (2) your property profits, and (3) your adjusted total income above the personal allowance. Anything unrelieved carries forward (gov.uk).

Example 1: basic-rate landlord

Rent £16,800, other costs £1,600, mortgage interest £5,500, salary £30,000. Property profit is £15,200, so the reducer is 20% × £5,500 = £1,100. Extra tax is £3,040 − £1,100 = £1,940.

Example 2: no other income

Same property, no salary. Adjusted total income above the allowance is only £2,630, so the reducer is capped at £526. That wipes out the tax, and £2,870 of interest carries forward to next year.

Higher-rate landlords

Relief is limited to 20% even if you pay 40% tax. That's why Section 24 hits higher-rate landlords hardest.

Estimate only, not tax advice. Rough 2026/27 figures for individual UK residential landlords using England, Wales and Northern Ireland rates (not Scotland, not companies). It doesn't submit anything to HMRC. Check with HMRC or a qualified accountant.

Keep MTD-ready records for every property with the UK Landlord Property Tracker, or try the free Section 24 calculator.

Rates checked on 15 October 2026 against official sources: gov.uk income tax rates · Section 24 relief · property allowance · MTD quarterly updates · 2027/28 property rates (Finance Act 2026 s.7).

General information only, not tax, legal or financial advice. Our liability is capped at the price paid, as far as the law allows. Your statutory rights are not affected. See the terms of sale.