Section 24 Property types affected?

Section 24 Property types affected?

10:06 AM, 17th February 2017, About 7 years ago 8

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Is there any official guidance from HMRC regarding what exactly a ‘buy to let’ property is? property type

This is important assuming that a property that require a HMO license may now not be considered wholly residential as the involvement of the landlord is much greater. Or mixed use properties such as a flat above a shop for example? Or student properties, are these considered buy to let under the new tax relief changes?


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Neil Patterson

10:23 AM, 17th February 2017, About 7 years ago

Hi Michael,

Any residential property held in your private name will be affected by Section 24 rules on mortgage interest relief including HMOs and Student properties.

Although I could not find an exhaustive list anywhere.

Holiday lets are excluded along with commercial.

Gunga Din

12:43 PM, 17th February 2017, About 7 years ago

I am under the impression that a three storey terraced property with a shop and two flats is two thirds liable for section 24 treatment.


13:12 PM, 17th February 2017, About 7 years ago

Very interesting threaded, I understand apportionment with shop/residential, but with HMO what about communial area. Certainly in respect to AIA HMRC view communial area as commercial so if communial area was say 5% floor space I would assume 95/5 apportionment?
Furthermore, could you include external bin store and path in this calculation, maybe another 5%. If you made Garden communal maybe another 10%
Thoughts ?

Rob Crawford

10:35 AM, 18th February 2017, About 7 years ago

This is the first I have heard of apportionment to reduce the impact of clause 24. So I hope this thread continues as I would appreciate the feed back. My question to those who are considering to apply this idea to an HMO is do you claim tax relief on the heating / water / council tax on 100% of the HMO or just the rented rooms? You can't have it both ways!

Rob Crawford

11:40 AM, 18th February 2017, About 7 years ago

....sorry, forgot to add, that if apportionment for tax relief on mortgagee in this way was proposed and HMRC then stated that utilities/Council tax had to be apportioned in the same way, then landlords with earnings below the higher rate and also those with no mortgage would be worse off!

Richard of York

14:24 PM, 14th June 2018, About 6 years ago

Just to kick this thread off again and pondering my tax return, I found this while searching for Section 24 & mixed use properties.....its a Scottish definition, but all I could find......

‘Mixed’ property transactions
A transaction where there is a mixture of residential and commercial interests (for example, a landed estate or a shop with a flat above it) is treated as a non-residential transaction and will therefore be subject to the non-residential LBTT rates and bands (see LBTT4011).

We have a number of shops with flats above - finding it difficult to get through to HMRC.

Any thoughts would be welcome.

Gunga Din

15:44 PM, 14th June 2018, About 6 years ago

Well resurrected, Sir!
I was disappointed there was no conclusive answer last time. With three such properties I watch with interest. I had already submitted the tax stuff to the accountant last time.

Richard of York

17:11 PM, 14th June 2018, About 6 years ago

There must be a few of us out there!

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