What is section 24

Section 24 of the Finance Act 2015 might mean that over half of UK landlords will fall into a higher rate of tax.

Although their income might not have increased, some might end up renting at a loss.

Landlords interest relief system is changing. 

Until recently, landlords were able to deduct the full cost of their mortgage interest payments on their rental properties before they pay tax. Starting in April 2017, mortgage, loan and overdraft interest costs will not be considered in calculating taxable rental income.
The changes will be phased in gradually over 4 years, starting from 5th April 2017. By 2020, 100% of finance costs will be restricted to 20% tax relief only.

This change could see many landlords with interest costs affected and end up paying more tax on their property income. In addition, landlords could be pushed into higher tax brackets which in turn could affect child tax credit assessments and student loan repayments, leaving landlords even more out-of-pocket.

Read more on our article on Section 24 for landlords

Please call Pelin Martin for your 30-minute free property consultation on +0208 994 7327 – pm@bluecrystallondon.co.uk

We inform our landlords on property industry updates with blogs on Residential Property Management London. There are many updates that landlords must keep up with whether it is tax, fire regulations, health and safety regulations, changes in the rental market or how best to keep the property maintained on time within budget.