Work out the income tax on your rental profit under Section 24, the rule that stops individual landlords deducting mortgage interest from their rental profit and gives a basic-rate tax credit instead. Enter a year's rent, expenses and finance interest, pick your tax band, and the calculator shows the tax due, what the restriction costs you compared with the old rules, and the same figures if the property were held in a limited company.
Your figures stay in your browser: nothing you type is sent to us or stored. We count only that the page was opened and that a calculation was run — how we count.
Current tax year by default. The calculator starts on the 2026 to 2027 tax year and its ordinary income tax rates. It can also show the new property income rates for the tax year starting April 2027Announced, not yet lawAnnounced at Autumn Budget 2026, to be legislated in Finance Bill 2026-27. Those rates apply to property income only: they do not change the income tax rates on earnings or pensions. Savings income has its own savings rates, which the same Budget also raises from that date; this calculator does not cover savings income. Scottish income tax rates are not modelled.
What Section 24 does
Before the restriction, a landlord who owned property personally deducted mortgage interest from rent like any other cost, so the tax was charged only on what was left. Under Section 24 the interest is no longer deducted. Income tax is charged on the rental profit before finance costs, and you then get a tax reduction worth the relief rate multiplied by your finance costs. For 2026 to 2027 that rate is 20%: Tax year 2026-27 (6 April 2026 to 5 April 2027); 20% since the restriction was fully phased in on 6 April 2020.
For a basic-rate taxpayer the credit roughly matches the tax the deduction used to save. For a higher-rate or additional-rate taxpayer it does not: the interest is effectively taxed at the gap between their own rate and the relief rate. Section 24 can also push a landlord into a higher band, because the rental profit counted towards their income now includes the money that went to the lender.
How the calculator works it out
Taxable rental profit is gross rent less allowable expenses. Finance interest is not deducted.
Income tax on that profit is charged at the rate for the band you pick, after any unused personal allowance you enter.
The tax reduction is the relief rate multiplied by the lowest of three amounts: your finance costs, your rental profit, and your income above the personal allowance including that profit. Any finance costs not used carry forward.
The tax due is the tax before the credit, less the reduction, never below zero.
For comparison, the "old rules" figure applies the same rate to profit after interest, with no credit. The difference is what Section 24 costs you.
Tax rates on rental profit, by tax year
Up to and including 2026 to 2027, rental profit is taxed at the ordinary income tax rates. From April 2027, property income is taxed at its own property income rates, and the Section 24 relief is given at the property basic rate. Status of the rates shown for that year: Announced at Autumn Budget 2026, to be legislated in Finance Bill 2026-27. They are not yet law and could change before the Finance Bill is passed. This is a change for property income only; savings income has its own savings rates, which are not covered here.
Tax year
Rates
Basic rate
Higher rate
Additional rate
Section 24 relief
2026 to 2027 (current)
Ordinary income-tax rates
20%
40%
45%
20%
from April 2027
Property income rates (announced, not yet law)
24%
44%
49%
24%
Holding the property in a limited company
Section 24 does not apply to companies. A company deducts finance interest in full and pays corporation tax on what is left: 19% on profits up to £50,000, 25% above £250,000, with marginal relief at a fraction of 3/200 between the two. The limits are divided by the number of associated companies plus one. Cash left in a company is not yet yours: paying it out as dividends is taxed again, which is why the calculator asks for an optional dividend rate rather than treating company profit as money in your pocket.
Worked examples
These figures were produced by running this page's own calculator on the rates shown here, so they move when the rates do. A higher-rate landlord has gross rent of £24,000, expenses of £4,000, mortgage interest of £9,000, and other income of £40,000 above the personal allowance.
In the current tax year
Taxable rental profit is £20,000, because the interest is not deducted. Tax on it at 40% is £8,000. The credit is 20% of £9,000, which is £1,800, leaving £6,200 to pay. Under the old rules the same figures would have produced £4,400, so Section 24 costs this landlord £1,800 a year.
The same figures from April 2027, on the announced rates
Under the property income rates announced for that year (not yet law), the profit is taxed at 44%, giving £8,800 before the credit. The credit rises to 24% of the interest, which is £2,160, so the tax due is £6,640. Section 24 still costs £1,800 compared with full deduction.
In a limited company
A company deducts the interest, so its profit chargeable to corporation tax is £11,000 and the corporation tax is £2,090, leaving £8,910 in the company. That is before any of it is paid out to the owner, which is taxed again, and before the costs of running a company and of moving a property into one.
Common mistakes
Treating mortgage interest as an expense on a personal tax return. It goes in as a finance cost for the credit, not as a deduction.
Counting capital repayments. Only interest and other finance costs count; repaying the loan is not a cost.
Comparing personal tax with company tax as if company profit were money in hand. It is not until it is paid out.
Rates used, and where they come from
Rates checked against their sources on 29 October 2026; due to be re-read by 27 January 2027. They are the same table the UK Property Portal members area uses.
Income tax on rental profit: 2026 to 2027 (current)
Income tax on rental profit: from April 2027, property income rates
Tax year 2027-28 onward (6 April 2027); applied to property income, not to other income. Announced at Autumn Budget 2026, to be legislated in Finance Bill 2026-27.
Tax year 2027-28 onward (6 April 2027). The relief is given at the property basic rate (Finance Act 2026, Sch. 1 para. 40), so it follows that rate, which was announced at Autumn Budget 2026, to be legislated in Finance Bill 2026-27. HMRC's Budget papers do not state the relief rate separately.
Income tax is worked out at the single rate for the band you pick, applied to the rental profit. If your rental profit straddles two bands the real figure differs.
Scottish income-tax rates are not modelled.
Your other income is taken as the figure you enter; tax on it is not calculated, and savings, dividend and personal-allowance tapering rules are not modelled.
Finance costs brought forward from earlier years, capital allowances, replacement-of-domestic-items relief, losses carried forward and the corporate interest restriction are not modelled.
Only residential finance costs are assumed. Furnished holiday lets, commercial property and jointly owned property (where profit is split) are not modelled.
Company profit left in the company is not your money: the company figures are company level, before extraction, unless you give a dividend tax rate.
Questions
What is Section 24?
It is the rule that stops individual landlords deducting mortgage interest and other finance costs from their residential rental profit. Instead, income tax is charged on the profit before finance costs and you receive a tax reduction at the relief rate, which is 20% for 2026 to 2027.
Does Section 24 affect basic-rate taxpayers?
Usually much less. The credit is given at the basic rate, so a landlord whose rental profit is taxed at the basic rate gets back roughly what the deduction used to save. It can still matter if the rental profit before interest pushes them into the higher band.
Do the new property income rates change my income tax on my salary?
No. The property income rates that apply from April 2027 apply to property income only. They do not change the income tax rates on earnings or pensions. Savings income has its own savings rates, which the same Budget also raises from that date; this calculator does not cover savings income.
Are the new property income rates law yet?
Not yet. The rates shown for the tax year starting April 2027 are not yet law. Status: Announced at Autumn Budget 2026, to be legislated in Finance Bill 2026-27. The separate property income rates are already in law (see the sources below), at lower figures; the Finance Bill is to change them to the figures shown here. Until it is passed, they could change, and this page will be updated if they do.
Does Section 24 apply to a limited company?
No. A company deducts finance costs in full and pays corporation tax on its profit. The calculator's company figures show that, at company level, before any of the profit is paid out to you.
An estimate worked out from the figures you enter. It is not financial or tax advice; check your own case against the guidance linked on this page, or with an adviser, before you act on it.