Landlord tax:
the complete guide
Landlords face three main tax pressure points: Section 24 restricts mortgage interest relief to a basic-rate credit rather than a full deduction, Capital Gains Tax applies on sale with a 60-day reporting deadline, and highly geared portfolios sometimes benefit from incorporating into a limited company, though the transfer itself can trigger upfront CGT and Stamp Duty.
Property tax for landlords has gotten more complicated since mortgage interest relief was restricted, and the right structure for one landlord isn't right for another. This guide covers the main pressure points.
Section 24: the change that reshaped landlord tax
Since Section 24 restricted mortgage interest relief to a basic-rate tax credit rather than a full deduction, geared landlords have seen their effective tax rate climb, sometimes well above their actual income tax band. See our full Section 24 guide for exactly how the mechanics work.
Selling a property: the CGT deadline that catches people out
Capital Gains Tax applies when you sell a rental property or second home, and UK residential property disposals carry a strict 60-day reporting and payment deadline from completion, far faster than the normal Self Assessment timeline. See our property CGT guide.
Furnished holiday lets: the old advantages are gone
The furnished holiday let regime, which used to offer meaningful tax advantages over standard residential lettings, has been abolished. See our FHL abolition guide for what changed and what it means for your current position.
Should you incorporate your portfolio?
Moving properties into a limited company avoids the Section 24 restriction entirely, since companies deduct mortgage interest in full, but the transfer itself can trigger Capital Gains Tax and Stamp Duty Land Tax as if the company were buying the properties from you at market value. See our incorporation guide for landlords for how to work out whether it's worth it.
In this guide
Capital Gains Tax on rental property
Rates, allowance, and the 60-day reporting deadline.
Section 24 explained
How mortgage interest relief changed for landlords.
Furnished holiday lets: the abolition
What changed, and what it means now.
Incorporating a property portfolio
Is it worth it? The breakeven maths explained.
Frequently asked questions
What is Section 24 for landlords?
Section 24 restricts individual landlords to a basic-rate tax credit on mortgage interest rather than a full deduction, which can push the effective tax rate on rental profit well above the landlord's actual income tax band for geared properties.
How quickly do I need to report CGT after selling a rental property?
UK residential property disposals must be reported and any Capital Gains Tax paid within 60 days of completion, far faster than the normal Self Assessment deadline.
Do furnished holiday lets still get special tax treatment?
No, the furnished holiday let regime has been abolished, removing the tax advantages it used to offer over standard residential lettings.
Is it worth incorporating a rental property portfolio?
It can be, particularly for highly geared portfolios affected by Section 24, but the transfer itself usually triggers Capital Gains Tax and Stamp Duty Land Tax, so the upfront cost needs weighing against the ongoing saving.
Get your landlord tax position reviewed
Book a free consultation and we'll check your Section 24 exposure and whether incorporating makes sense.