🏢 Section 24 Impact

Buy-to-Let Profitability Calculator

The 2026 housing market is brutal for landlords. Calculate your true net profit after factoring in Section 24 tax rules and rising mortgage rates.

Buy-to-Let Profitability Calculator (Section 24)

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Real Profitability (Post-Tax)

Gross Annual Rent£14,400
Annual Mortgage Interest-£9,000
Income Tax Owed (Section 24)-£3,960
Net Monthly ProfitAfter mortgage & tax
£120/mo

Warning: Because you are a higher rate taxpayer, Section 24 rules prevent you from fully deducting your mortgage interest. Your effective tax rate on gross rent is 27.5%, which severely damages profitability.

Is Buy-to-Let still worth it in 2026?

Between the looming Renters' Rights Bill abolishing Section 21 evictions, the Capital Gains Tax allowance dropping to just £3,000, and the Stamp Duty surcharge rising to 5%, landlords are feeling the squeeze.

But the biggest silent killer of profitability is Section 24. If you are a higher rate (40%) taxpayer, you are no longer allowed to deduct your mortgage interest as a business expense.

This means you pay tax on money you don't even get to keep. As mortgage interest rates have risen, many landlords are discovering that their entire rental profit is wiped out by their tax bill. Use the calculator above to see if your property is actually generating positive cash flow.

Landlord Tax FAQs

What is Section 24 for landlords?
Section 24 is a tax law that prevents landlords from deducting mortgage interest from their rental income before calculating tax. Instead, you pay tax on your total gross rental income, and then receive a basic 20% tax credit towards your mortgage costs.
Why are higher rate taxpayers losing money on buy-to-let?
Because of Section 24, if you are a 40% taxpayer, you pay 40% tax on the gross rent but only get a 20% credit for the mortgage. If your mortgage rate is high, this can result in a tax bill that is larger than your actual cash profit, meaning you lose money every month.
What is the new Stamp Duty surcharge for landlords?
As of the October 2024 budget, the Stamp Duty surcharge for purchasing an additional property (like a buy-to-let) was increased from 3% to 5%.
Are limited company buy-to-lets affected by Section 24?
No, Section 24 only applies to properties owned by individuals. Properties owned through a Limited Company (SPV) can still fully deduct mortgage interest as a business expense, paying Corporation Tax on the true profit.