MORTGAGE Buy-to-Let Tax Calculator
See how Section 24 affects your buy-to-let tax bill and net rental profit.
Higher rate taxpayer. Annual income £50,271 to £125,140.
Monthly Cashflow (After Tax)
£180
Net profit per month
Section 24 Tax Comparison
Before S24
Rental income
£14,400
Deductions
-£8,400
Taxable profit
£6,000
Tax owed (40%)
£2,400
After S24
Rental income
£14,400
Deductions (no interest)
-£1,200
Taxable profit
£13,200
Tax owed (after 20% credit)
£3,840
Tax Comparison
£120 extra per month
Effective Tax Rate
26.7%
Of rental income
20% Tax Credit
£1,440
Basic rate relief/yr
Annual Cashflow Breakdown
What is Section 24?
Since April 2020, landlords can no longer deduct mortgage interest from rental income before calculating tax. Instead, you receive a 20% tax credit on your mortgage interest payments. This particularly affects higher and additional rate taxpayers, who now pay more tax on their rental profits.
For basic rate taxpayers, the effect is neutral. For higher rate taxpayers, the difference can be significant as you're taxed at 40% but only receive 20% relief on mortgage interest.
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