Costs & Taxes
Section 24 (Mortgage Interest Relief)
Restriction on mortgage interest tax deductions for landlords
Full Definition
Section 24 of the Finance Act 2015 restricts mortgage interest relief for individual landlords to the basic rate of tax (20%). This means higher-rate taxpayers can no longer deduct full mortgage interest from rental income. The change significantly impacts profitability for leveraged landlords and has driven many to use limited company structures.
Related Terms
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Stamp Duty Land Tax (SDLT)
Tax paid when purchasing property over £250,000
LBTT (Land and Buildings Transaction Tax)
Scottish equivalent of Stamp Duty
LTT (Land Transaction Tax)
Welsh equivalent of Stamp Duty
Capital Gains Tax (CGT)
Tax on profit when selling investment property
Limited Company Buy-to-Let
Purchasing properties through a company structure
Ground Rent
Annual payment to freeholder for leasehold properties