A petition, in response to the changes under Section 24, has gained over 29,000 signatures. This petition calls for the reversal of the changes made under section 24 which restrict the tax relief that property owners can receive on their finance costs. Section 24 applies to all individual property owners within the private sector including UK-resident property owners letting in the UK or overseas, non-UK resident property owners letting in the UK and property owners letting a property through a partnership.
What is section 24?
In 2016, property owners were able to deduct specific finance costs (e.g. payments on mortgage or interest on loans funding furnishings) from their rental profits before calculating the tax.
From April 2017 to April 2020, Section 24 had changed this by no longer allowing property owners to deduct certain finance costs from their rental income before it is taxed.
What finance cost tax relief do property owners get in 2023?
Following the Section 24 changes, property owners can now receive a tax-credit at a basic 20% rate on the lower amount from the following:
How has the government responded to the petition?
The government has responded to the petition saying that it will “continue to set mortgage interest relief against rental income at the basic rate of tax.” The petition will be considered for debate in parliament if it hits 100,000 signatures.
T +44 (0)203 488 1488