Section 24 calculator

It runs your figures twice. First it taxes your rent less costs with mortgage interest left out of the profit and given back only as a basic-rate tax credit, which is how Section 24 works. Then it taxes the same figures as if the interest were fully deductible, the way rental profits were taxed before the restriction. The difference is the extra tax Section 24 costs you each year. The calculation runs in your browser and nothing you enter is stored.

Four numbers for a full tax year: the rent you receive, the mortgage interest you pay on your rental properties, your other allowable letting costs, and your other taxable income such as salary, pension or self-employment profit. Your last tax return or your accountant's rental accounts are the easiest source. If you own properties jointly, enter your own share of the rent, interest and costs, because each owner is taxed separately on their share.

No. Only the interest part of your mortgage payments is a finance cost. Capital repayments reduce the loan rather than being a cost of borrowing, so they're never deductible and never qualify for the Section 24 credit, even though they come out of your cash. If you have repayment mortgages, your annual lender statement usually shows how much of the year's payments was interest. Leave out interest on loans for commercial property too, as Section 24 doesn't apply to it.

The credit is the basic rate multiplied by the smallest of three figures: your finance costs, your rental profit before interest, and your income other than savings and dividends after the personal allowance. In 2026/27 the rate is 20%. The calculator applies the same test, so a landlord whose interest is larger than their rental profit gets a credit only on the profit, not the full interest bill. It doesn't add amounts brought forward from earlier years.

Yes. Finance Act 2026 links the credit to the new property basic rate, so from 2027/28 it's 22% rather than 20%. At the same time, rental profits will be taxed at their own rates of 22%, 42% and 47% in England, Wales and Northern Ireland. Choose 2027/28 in the calculator to see both changes together. For 2026/27, rent is still taxed at 20%, 40% and 45% with a 20% credit.

For a higher-rate taxpayer, Section 24 costs the gap between the rate on the rent and the rate of the credit. In 2026/27 that's 40% less 20%; in 2027/28 it's 42% less 22%. Both gaps are 20 percentage points, so the extra cost of Section 24 itself barely moves. What does change is the total tax on your rental profit, which rises by two percentage points in every band from April 2027, whatever your borrowing.

If your interest is more than your rental profit before interest, or more than your taxable income, the credit is capped and the unused interest carries forward. The calculator shows this amount separately. Carried-forward finance costs aren't lost: they're added to the next year's relievable amount and can be used whenever there's enough rental profit, with no time limit. Heavily geared portfolios and years with large repair bills are where this usually shows up.

It can. Because mortgage interest isn't deducted, your taxable income is higher than your real profit. Once total income goes above £100,000, the £12,570 personal allowance is reduced by £1 for every £2 over, and it's gone completely at £125,140. The calculator builds in this taper, which is why landlords with income in that range can see a much larger Section 24 cost than they expected.

Often not much. If all your income, including rent before interest, stays within the basic rate band, the 20% credit matches the 20% tax you'd have saved, so the calculator may show little or no extra tax. Problems start when adding back interest pushes you into the higher rate band, or when interest exceeds your rental profit and the credit is capped. That's why landlords who see themselves as basic-rate taxpayers can still be caught.

No to both. Section 24 restricts finance costs for individuals, partnerships, trustees and estates letting residential property. A company deducts its interest in full against its rental profits and pays corporation tax instead. Loans for commercial property, such as shops or offices, are also outside the restriction. The calculator assumes residential property owned personally, so don't include rent or interest from commercial lets in your figures.

Yes. The furnished holiday lettings regime was abolished from 6 April 2025, and with it the exemption from the finance cost restriction. Interest on a former holiday let owned personally now gets only the basic-rate credit, like any other residential let. You can include holiday let rent, costs and interest in the calculator alongside your other properties. Losses from the old holiday let business carry forward against your wider property business.

Only partly. The calculator shows the corporation tax a company would pay on your cash profit: 19% up to £50,000, 25% above £250,000, with marginal relief in between. That's tax on profits left in the company. Taking money out as dividends or salary is taxed again, and moving properties into a company can trigger capital gains tax and SDLT. The incorporation calculator gives a fuller picture of that decision.

It's for one individual in England, Wales or Northern Ireland. It ignores dividends and savings income, pension contributions, Gift Aid, Scottish income tax rates, finance costs brought forward from earlier years and rental losses. It treats all the interest as relating to residential lettings. Each of these can change your real bill, so treat the result as a guide to the size of the issue rather than a figure for your tax return.

When the calculator shows a meaningful extra cost each year, when your income is near £100,000, or when you're planning to refinance, buy more or restructure. Options can include changing ownership between spouses, paying down debt or moving properties into a company, and each has costs and conditions. A Chartered Tax Adviser can look at your whole position. Work is on a fixed fee agreed upfront, and we respond the same working day.