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Before 2017: The interest for your mortgage was 100% deductible. Since most landlords have interest-only mortgages (where you pay only the interest each month and the price of the property at the end of the period), you could basically claim all mortgage repayments.
After 2017: changes are rolled gradually (see below) and landlords receive a new tax credit – somewhat less generous than the existing mortgage interest tax relief.
It has fallen gradually each year:
|Tax Year||Mortgage interest deductible 100%||Deductible at a 20% tax credit|
The 20% tax credit applies to the lowest of:
It all depends on two things:
3 things can happen:
You might also want to read our guide to paying tax on rental income here.