Tax
Section 24 Explained for Landlords
What Section 24 changed, who it affects and how to plan around it in 2026.
The Landvale Team·Updated 1 July 2026·6 min read
Key takeaways
Section 24 phased out full mortgage interest deduction between 2017 and 2020.
Individual landlords now get a 20% credit, not a deduction.
Companies are unaffected — interest remains fully deductible.
Higher-rate taxpayers see the biggest impact.
It can turn cash-flow-positive properties into taxable losses.
What Section 24 actually changed
Before 2017, individual landlords deducted mortgage interest as an expense — reducing taxable rental profit pound for pound. From April 2020, the deduction is fully replaced by a 20% tax credit. Same £6,000 of interest now saves £1,200 in tax instead of up to £2,700.
Who Section 24 affects
•Higher and additional-rate individual landlords — biggest impact.
•Basic-rate landlords pushed into higher rate by rental profit — significant impact.
•Companies — unaffected. Interest remains fully deductible.
•Landlords with no mortgage — unaffected.
Planning around Section 24
•Incorporation — moves interest back to full deduction, but triggers SDLT and CGT.
•Beneficial interest transfer to a lower-rate spouse.
•Refinance to lower interest — direct saving.
•Repayment mortgages — reduce interest exposure over time.
Landvale's Section 24 modelling
Landvale applies the S24 credit automatically in the tax estimator, per property and per portfolio. See the effective marginal rate and the incorporation break-even in one screen.
Pillar guide
The Complete Guide to Landlord Accounting
→
Frequently asked questions
Yes — the rule applies to all residential rentals held by individuals.
