Section 24 calculator
Section 24 calculator: own personally or through a limited company?
Enter a buy-to-let's price, rent, mortgage and running costs, and your income tax band. The calculator works out the income tax you would pay owning it in your own name under Section 24, the corporation tax through a limited company, the cash left after tax each way, and the stamp duty for each. It shows the shape of the difference; it is not tax advice.
Work out your own figures
Choose your tax band and the tax year, then fill in the deal. A blank box counts as nothing. The answer comes from the same engine as the buy-to-let calculator.
What Section 24 changed
For a landlord who owns property in their own name, mortgage interest is not taken off the rental profit before income tax is worked out. Instead the tax bill is cut by a credit of 20% of the lowest of three figures: the mortgage interest, the property profit, and your income above the personal allowance. Whatever that lowest figure leaves out is carried forward to the next year.
A basic-rate taxpayer ends up close to where they were before. A higher or additional-rate taxpayer pays tax at their own rate on the profit before the interest, while the credit is only at the basic rate, so the interest costs them more. That is why so many landlords now compare buying through a limited company.
How a limited company is taxed
Section 24 applies only to individuals. A company deducts the mortgage interest like any other cost and pays corporation tax on the profit: 19% (profits up to £50,000) in the worked example. Taking the money out as dividends adds dividend tax at your band, after the dividend allowance. The calculator shows both ends: the profit left in the company, and the cash in your hands if all of it is paid out this year.
It does not model phased extraction, salaries, the cost of running a company or what happens when you sell. Take the figures to an accountant before you decide.
Stamp duty for each
A company that runs a property rental business claims relief and pays the same stamp duty as you would personally, the standard rates plus the 5% surcharge. A company that cannot claim it pays a flat 17% on a home over £500,000. The relief is withdrawn if the company stops meeting the conditions within three years.
What each box means
- Your income tax band
- The band your other income puts you in. It sets the tax on the property profit and on any dividends.
- Tax year
- 2026/27 uses today's rates. Choose the next year to see the property income rates that start in April 2027.
- Other taxable income
- Optional. Only used to limit the mortgage interest credit. Leave it blank to assume enough income for the band you chose.
- Corporation tax rate
- Leave it blank for the real rates and marginal relief, worked out on the company's profit.
A worked example
The buy-to-let from the buy-to-let calculator: £200,000, let for £1,100 a month, with a 25% deposit and an interest-only mortgage at 5.5%. Owned by a higher-rate taxpayer, then by a basic-rate one, in 2026/27.
| Mortgage interest in the first year | £8,250 |
|---|---|
| Taxable profit, owned personally | £9,672 |
| Section 24 tax credit | £1,650 |
| Income tax to pay | £2,219 |
| After tax per year, owned personally | -£797 |
| Corporation tax | £270 |
| Left in the company | £1,152 |
| After tax per year, company, all paid out | £919 |
| Income tax to pay | £284 |
|---|---|
| After tax per year, owned personally | £1,138 |
| After tax per year, company, all paid out | £1,082 |
Before tax the property makes £1,422 a year. Owned personally by a higher-rate taxpayer, its cash flow after tax is -£797 a year, because tax is charged on £9,672 of profit before the interest. Through a company the same property leaves £919 after corporation tax and dividend tax. On the 2027/28 rates the personal figure becomes -£825.
Questions and answers
What is Section 24?
It is the rule that stops individual landlords deducting mortgage interest from their rental profit. Instead they get a tax credit of 20% of the interest, or of a lower figure where the profit or income is smaller, with anything left over carried forward.
Does Section 24 apply to a limited company?
No. A company deducts mortgage interest as a normal cost and pays corporation tax on what is left. Taking the profit out as dividends is taxed separately.
Is a limited company always better for a buy-to-let?
No. It depends on your tax band, the size of the mortgage, whether you take the profit out, and the costs of running a company. In the worked example a basic-rate taxpayer keeps slightly more owning personally, while a higher-rate taxpayer keeps more through a company. Ask an accountant.
Do I pay more stamp duty through a company?
Not if the company runs a property rental business and claims relief: it pays the standard rates plus the surcharge, like you would. A company that cannot claim it pays a flat 17% on a home over £500,000.
What changes in April 2027?
From 6 April 2027 property income is taxed at 22% (basic), 42% (higher) and 47% (additional), and the mortgage interest tax credit becomes 22% instead of 20%. Choose 2027/28 in "Tax year" to see the comparison on those rates.
Is this tax advice?
No. It is a simplified model that shows the shape of the difference. Real Section 24 relief and profit extraction planning are more involved. Take the figures to an accountant before you decide.
Read the guides
Other calculators
These figures are estimates from the Deal Analyser calculator, using the UK rules as checked on 10 October 2026. They are not financial, tax or legal advice. Check them for your own deal, and take advice from a regulated adviser, accountant or solicitor before you commit.
See the tax inside a whole deal
The buy-to-let calculator shows the comparison alongside the yield, the cash flow and the lender's test. It is free to use, and your results show straight away without an account. Sign in when you want to save them.
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