{"id":6022,"date":"2025-11-14T11:01:01","date_gmt":"2025-11-14T11:01:01","guid":{"rendered":"https:\/\/ttaccountancy.com\/blog\/?p=6022"},"modified":"2025-11-14T11:01:11","modified_gmt":"2025-11-14T11:01:11","slug":"how-section-24-affects-landlords-what-you-need-to-know-in-2025","status":"publish","type":"post","link":"https:\/\/ttaccountancy.uk\/blog\/how-section-24-affects-landlords-what-you-need-to-know-in-2025\/","title":{"rendered":"<strong>How Section 24 Affects Landlords: What You Need to Know in 2025<\/strong>"},"content":{"rendered":"\n<p>If you\u2019re a landlord in the UK, <strong>Section 24 of the Finance Act 2015<\/strong> is likely one of the biggest factors affecting your rental profits \u2014 and it remains just as relevant in <strong>2025<\/strong>.<\/p>\n\n\n\n<p>At <strong>TT Accountancy Services (TTAS)<\/strong>, many landlords come to us asking how Section 24 impacts their tax bill today, what they can legally deduct, and how to plan ahead.<\/p>\n\n\n\n<p>This guide explains <strong>everything you need to know about Section 24 in 2025<\/strong>, how to reduce its impact, and the smart tax strategies landlords across London are now using.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h1><strong>What Is Section 24?<\/strong><\/h1>\n\n\n\n<p>Section 24 (also known as the \u201cTenant Tax\u201d) is a tax rule that <strong>restricts the amount of mortgage interest landlords can deduct<\/strong> from their rental income.<\/p>\n\n\n\n<p>Before Section 24:<br>\u2714 Landlords could deduct <strong>100%<\/strong> of mortgage interest as an expense.<\/p>\n\n\n\n<p>After Section 24 (fully implemented in 2020 and still active in 2025):<br>Mortgage interest is <strong>no longer an allowable expense<\/strong>.<br>\u2714 Instead, landlords receive a <strong>20% tax credit<\/strong> on mortgage interest.<\/p>\n\n\n\n<p>This means many landlords \u2014 especially higher-rate taxpayers \u2014 pay <strong>significantly more tax<\/strong> than they used to.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h1><strong>Who Is Affected by Section 24 in 2025?<\/strong><\/h1>\n\n\n\n<p>Section 24 applies to:<\/p>\n\n\n\n<ul>\n<li>Individual landlords<\/li>\n\n\n\n<li>Partnerships<\/li>\n\n\n\n<li>Landlords filing under personal income (Self-Assessment)<\/li>\n<\/ul>\n\n\n\n<p>It <strong>does NOT apply<\/strong> to:<\/p>\n\n\n\n<ul>\n<li>Limited companies<\/li>\n\n\n\n<li>Furnished Holiday Lets (FHLs)<\/li>\n\n\n\n<li>Commercial property landlords<\/li>\n\n\n\n<li>Property investors using SPVs<\/li>\n<\/ul>\n\n\n\n<p>If you&#8217;re renting out residential property in your <strong>personal name<\/strong>, Section 24 affects you.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h1><strong>How Section 24 Impacts Landlords Financially<\/strong><\/h1>\n\n\n\n<h3>1. <strong>Higher Income Tax Bills<\/strong><\/h3>\n\n\n\n<p>Because rental profits are calculated <strong>before<\/strong> deducting mortgage interest, many landlords appear to earn more on paper \u2014 pushing them into:<\/p>\n\n\n\n<ul>\n<li>Higher tax brackets<\/li>\n\n\n\n<li>Higher rate (40%) tax<\/li>\n\n\n\n<li>Additional rate (45%) tax<\/li>\n<\/ul>\n\n\n\n<h3>2. <strong>Reduced Cash Flow<\/strong><\/h3>\n\n\n\n<p>Your rental income hasn\u2019t changed, but your <strong>tax bill has increased<\/strong>, reducing monthly profit.<\/p>\n\n\n\n<h3>3. <strong>Possible Loss of Personal Allowance<\/strong><\/h3>\n\n\n\n<p>If Section 24 inflates your taxable income above \u00a3100,000, you could begin losing your personal allowance.<\/p>\n\n\n\n<h3>4. <strong>Lower Return on Investment<\/strong><\/h3>\n\n\n\n<p>For highly leveraged properties, some landlords see their returns shrink or disappear altogether.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h1><strong>Example (2025): How Section 24 Changes Tax Calculations<\/strong><\/h1>\n\n\n\n<p><strong>Before Section 24:<\/strong><br>Rental income \u2013 mortgage interest = taxable profit.<\/p>\n\n\n\n<p><strong>After Section 24:<\/strong><br>Rental income is taxed <strong>in full<\/strong>, and you receive a <strong>20% credit<\/strong> on mortgage interest.<\/p>\n\n\n\n<p>If you&#8217;re a <strong>40% taxpayer<\/strong>, you&#8217;re effectively losing <strong>half<\/strong> of the relief you used to get.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h1><strong>Strategies to Reduce Section 24 Impact in 2025<\/strong><\/h1>\n\n\n\n<p>At TTAS, we help London landlords legally minimise Section 24 exposure using smart tax planning, including:<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2>1. <strong>Incorporating into a Limited Company<\/strong><\/h2>\n\n\n\n<p>Companies can still deduct <strong>100%<\/strong> of mortgage interest.<\/p>\n\n\n\n<p>Benefits:<\/p>\n\n\n\n<ul>\n<li>Lower Corporation Tax rates<\/li>\n\n\n\n<li>Full interest deductibility<\/li>\n\n\n\n<li>Tax-efficient profit extraction<\/li>\n<\/ul>\n\n\n\n<p>Not always suitable \u2014 but worth assessing.<\/p>\n\n\n\n<p> <strong>TTAS can run a full \u201cIncorporation vs Personal Ownership\u201d tax comparison.<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2>2. <strong>Using a Special Purpose Vehicle (SPV)<\/strong><\/h2>\n\n\n\n<p>Many buy-to-let investors now operate through SPVs for:<\/p>\n\n\n\n<ul>\n<li>Tax efficiency<\/li>\n\n\n\n<li>Easier lending terms<\/li>\n\n\n\n<li>Lower long-term tax exposure<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2>3. <strong>Switching to a Furnished Holiday Let (FHL)<\/strong><\/h2>\n\n\n\n<p>FHLs are treated differently and <strong>not affected by Section 24<\/strong>.<\/p>\n\n\n\n<p>They come with better tax advantages, including:<\/p>\n\n\n\n<ul>\n<li>Capital allowances<\/li>\n\n\n\n<li>Higher deductible expenses<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2>4. <strong>Mortgage Restructuring<\/strong><\/h2>\n\n\n\n<p>Many landlords benefit from:<\/p>\n\n\n\n<ul>\n<li>Switching to lower-interest products<\/li>\n\n\n\n<li>Extending mortgage terms<\/li>\n\n\n\n<li>Using interest-only mortgages for cash-flow flexibility<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2>5. <strong>Claiming All Other Allowable Expenses<\/strong><\/h2>\n\n\n\n<p>Even though mortgage interest is restricted, you can still fully claim costs like:<\/p>\n\n\n\n<ul>\n<li>Repairs and maintenance<\/li>\n\n\n\n<li>Agency fees<\/li>\n\n\n\n<li>Insurance<\/li>\n\n\n\n<li>Service charges<\/li>\n\n\n\n<li>Accountancy fees<\/li>\n<\/ul>\n\n\n\n<p>TTAS helps ensure landlords claim <strong>every HMRC-approved expense<\/strong>.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h1><strong>Section 24: What to Expect in 2025<\/strong><\/h1>\n\n\n\n<p>As of 2025:<br>\u2714 Section 24 remains in place<br>\u2714 No government repeal has been announced<br>\u2714 Pressure from landlord associations continues<br>\u2714 More landlords are choosing incorporation or selling low-performing properties<\/p>\n\n\n\n<p>It\u2019s more important than ever to have a <strong>tax strategy<\/strong>, not just file a return.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h1><strong>How TT Accountancy Services Supports Landlords<\/strong><\/h1>\n\n\n\n<p>TTAS works with landlords across London to help them:<\/p>\n\n\n\n<ul>\n<li>Reduce Section 24 tax exposure<\/li>\n\n\n\n<li>File accurate Self-Assessment tax returns<\/li>\n\n\n\n<li>Structure property ownership tax-efficiently<\/li>\n\n\n\n<li>Improve rental profitability<\/li>\n\n\n\n<li>Manage buy-to-let portfolios strategically<\/li>\n<\/ul>\n\n\n\n<p><strong>Need advice?<\/strong><br>Book a landlord tax consultation: <a href=\"https:\/\/ttaccountancy.com\/contact\" target=\"_blank\" rel=\"noopener\">https:\/\/ttaccountancy.com\/contact<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>Section 24 is one of the most significant tax changes UK landlords have ever faced \u2014 and it continues to affect profits in <strong>2025<\/strong>.<\/p>\n\n\n\n<p>But with the right planning, restructuring, and tax strategy, landlords can:<br>\u2714 Reduce unnecessary tax<br>\u2714 Improve monthly cash flow<br>\u2714 Protect long-term property investment returns<\/p>\n\n\n\n<p><strong>TT Accountancy Services is here to help you navigate UK landlord tax rules with clarity and confidence.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you\u2019re a landlord in the UK, Section 24 of the Finance Act 2015 is likely one of the biggest factors affecting your rental profits \u2014 and it remains just as relevant in 2025. At TT Accountancy Services (TTAS), many landlords come to us asking how Section 24 impacts their tax bill today, what they [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":6023,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_mi_skip_tracking":false,"_mbp_gutenberg_autopost":false},"categories":[130],"tags":[],"_links":{"self":[{"href":"https:\/\/ttaccountancy.uk\/blog\/wp-json\/wp\/v2\/posts\/6022"}],"collection":[{"href":"https:\/\/ttaccountancy.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ttaccountancy.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ttaccountancy.uk\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ttaccountancy.uk\/blog\/wp-json\/wp\/v2\/comments?post=6022"}],"version-history":[{"count":1,"href":"https:\/\/ttaccountancy.uk\/blog\/wp-json\/wp\/v2\/posts\/6022\/revisions"}],"predecessor-version":[{"id":6024,"href":"https:\/\/ttaccountancy.uk\/blog\/wp-json\/wp\/v2\/posts\/6022\/revisions\/6024"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ttaccountancy.uk\/blog\/wp-json\/wp\/v2\/media\/6023"}],"wp:attachment":[{"href":"https:\/\/ttaccountancy.uk\/blog\/wp-json\/wp\/v2\/media?parent=6022"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ttaccountancy.uk\/blog\/wp-json\/wp\/v2\/categories?post=6022"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ttaccountancy.uk\/blog\/wp-json\/wp\/v2\/tags?post=6022"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}