Definition
Section 24 refers to UK mortgage interest relief restrictions for personally owned residential rental property. It can mean finance costs are not fully deducted before calculating taxable profit.
How it affects a property deal
Section 24 can make tax higher than many investors expect, especially for higher-rate taxpayers using debt. A deal may show positive pre-tax cashflow but become weak after tax.
What to check
- Whether the property is personally owned or held in a company.
- The investor’s marginal tax rate.
- How much of the modelled profit is being created before finance costs.
- Whether company ownership should be compared as a separate scenario.
Koreograph models this as decision support, not tax advice.