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The monthly magazine providing news analysis and professional research for the discerning private investor/landlord

Finance Interest - What Can be Claimed?

Most property investors use mortgages and other finance types to fund their property rental business, and so have to pay interest in order to do so. This article looks at what finance interest can be claimed as tax deductible and how relief is obtained.

Finance interest is an allowable expense, generally
As a general principle, interest payable on borrowings used to fund a property rental business is a tax deductible expense against rental business profits.

For most landlords the main interest payable is on mortgages secured on rental property. However, interest is allowable regardless of whether the borrowings are secured by a lender (usually via a charge on the rental (property), and regardless of where the borrowings are from.

Therefore, interest on any type of borrowing is in principle allowable - finance sources may include:

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