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  • Section 24 HQ

    What is Section 24 for landlords?



    It seems many landlords are not up to speed with what Section 24 is!

    People have been asking on our youtube channel to explain what it is as they have never heard of it, so I have put together this comprehensive guide and resource:

    What is Section 24?

    Section 24 will restrict relief for finance costs on residential properties to the basic rate of Income Tax. This has been introduced gradually from 6 April 2017.

    Finance costs includes mortgage interest, interest on loans to buy furnishings and fees incurred when taking out or repaying mortgages or loans. No relief is available for capital repayments of a mortgage or loan.

    In simple terms, Landlords will no longer be able to deduct all of their finance costs from their property income to arrive at their property profits. They will instead receive a basic rate reduction from their income tax liability for their finance costs.

    Landlords will be able to obtain relief as follows:

    • in 2017 to 2018 the deduction from property income (as is currently allowed) will be restricted to 75% of finance costs, with the remaining 25% being available as a basic rate tax reduction
    • in 2018 to 2019, 50% finance costs deduction and 50% given as a basic rate tax reduction
    • in 2019 to 2020, 25% finance costs deduction and 75% given as a basic rate tax reduction
    • from 2020 to 2021 all financing costs incurred by a landlord will be given as a basic rate tax reduction

    Here are some of our top resources to help you understand Section 24 and if it will impact you:

    New landlord question - caught by Section 24? 

    The Ultimate Section 24 Guide

    Free Section 24 Survival Guide 

    Section 24 particularly impacts portfolio LLs

    Section 24 Landlord "Survival Guide" 

    Section 24 has made me go back to work

    1st "concrete" signs of impact of Section 24

    1 in 4 landlords to exit due to Section 24

    Section 24 - unreported dangers that may bite

    Section 24: Do I add up? What am I missing?

    Section 24 solution for portfolio landlords

    Section 24 defences & mitigation strategies

    Section 24 - Letting agent perspective - ARLA

    Section 24 "bringing landlords to their senses" claim

    Section 24 - landlords must take action now

    How many properties have you sold due to S24?

    Up-date: Sold 25 properties to date > S24

    Almost 4,000 Landlords a month are selling!

    Highest number of landlords selling up ...

    "Dinner Party" Landlords selling up ...

    "Landlord Shuffle" - selling to your own co

    Here is a reprise of our "Axe the Tenant Tax" Week 2017 which was run to create awareness of Section 24 going live:



    Axe the Tenant Tax Awareness Week 2017 - powered by Tenant Tax campaign

    Launch of "Axe the Tenant Tax Awareness Week"  

    Up-date from National Landlords Association

    Landlord Gemma Shinh on impact of S24 on her 

    Up-date from Residential Landlords Assoc. 

    Up-date from ARLA/propertymark 

    Here are some of our most popular videos on this topic:


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    This is fantastic of you Vanessa!

    It's as if you read my mind...

    Thank You

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    Glad to be of assistance!

    ​Our "Section 24 HQ" category is where all discussions of Section 24 live in the private rented sector are hosted.  Click on the category header to see all these discussions curated in one place.

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    Ah.... I guess some people are only just discovering the nasty shock while filling in their tax return this year.....

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    DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.


    Just as we have been predicting since S24 was announced in 2015! Sad

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    ...followed by the sound of s21 notices hitting the doormant making a lot of previously content tenants very unhappy Sad

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    DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.

    It's just beginning - sit back with some popcorn and watch the fireworks!

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    I am so pleased I took action over two years ago

    I have been portrayed as a broken clock on PT and a Doom Monger

    Its time for me to shut up and watch this unfold

    what a shock Landlords who never visit the likes of Property Tribes are going to get

    and its going to be so interesting to watch

    First S24 Tax in Jan 19

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    Any landlord who is worried about what impact Section 24, and indeed ever increasing legislation, will have on their incomes please have a look at our website to see if we can help:

    https://www.somersetestatesreit.co.uk

    We might be able to help you maintain an income from property without all the hassle of being a landlord!

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    Somerset Estates REIT PLC

    The Residential Buy to Let REIT

    http://www.somersetestatesreit.co.uk

    I don't think there is much more PT can do to assist LL.

    The PT resources are there to be used by any LL.

    If LL are too thick or stupid to bother using resources like PT then I have absolutely no sympathy with them.

    I hope that S24 destroys these type of LL.

    Since 2015 they should have known what was coming.

    Let us hope there will be many bankrupted LL and lots of homeless tenants.

    Then we can see what a disaster S24 is.

    Perhaps many of the ignorant LL give up and get out of the game.

    I was just speaking to my gas engineer discussing various things.

    He said he goes to houses divided into 8 bedrooms................very small ones!!!

    LL hasn't a clue about the new HMO regulations

    When you see and hear all this stuff about dopey LL I feel that despite the bureaucracy that there needs to be a National LL licensing scheme.

    It cannot be right that LL know so little putting their tenants at risk of being homeless through no fault of their own.

    I believe it is now the appropriate time for ALL LL to be licensed.

    Every council should be able to introduce variations of a National licence based on its own requirements as a consequence of local circumstances.

    But the basics of any licence should be that every LL has

    CTL

    CTL to tenants allowed by any lender.

    Relevant insurance for the letting including PL insurance

    Just these requirements will put many illegal LL out of business.

    Something must be done about LL business ignorance.

    It is simply inexcusable that so many LL are unaware of S24.

    It is the tenants I feel sorry for.

    They will become victims of LL ignorance.

    That is simply unfair.

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    What you state is very valid.

    I'm not the networking type but I do occasionally bump into small landlords through work. Most are not aware of S24 but they're also not aware of the need to declare their rental income. It seems they will be unaffected by the changes until such times as HMRC catch up with them.

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