Are Second Mortgages Tax Deductible?
Historically, it was possible for landlords to claim tax back on rental income. However, since April 2020, it is no longer possible to deduct tax from rental income. However, you can now qualify for Landlord Mortgage Interest Tax Relief.
Landlord Mortgage Interest Tax Relief
This is a new tax-credit available to landlords and is based on 20% of your mortgage interest payments. While this is a benefit for all qualifying landlords, those higher-rate taxpayers will have previously received tax relief of 40% under the old rules, and so this new system is less substantial.
Due to these changes, landlords will need to declare any rental income that isn’t used to repay the mortgage on their tax returns going forward.
It is important to note, that these rules only affect private landlords, and not those who own their properties through a business.