Section 24 Property types affected?

by Readers Question

5 months ago

Section 24 Property types affected?

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Section 24 Property types affected?

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

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?



Neil Patterson

5 months 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

5 months 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.

Michael Groves

5 months 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

5 months 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

5 months 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!

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