Mortgage interest and box 44: the 20% tax reduction for landlords

Updated 7 October 2026

If you let a residential property, you cannot deduct mortgage interest from your rental income as an expense. Instead, you put it in box 44 of the UK property pages (SA105), and HMRC gives you a tax reduction at the basic rate.

What goes in box 44

Box 44 is for residential property finance costs: the costs of getting a loan, or alternative finance, to buy a residential property that you let, and the interest on that loan or the alternative finance payments. Do not also include them in boxes 24 to 29.

For a non-residential property, the rules are different: you claim the loan costs and the full interest as an expense in box 26.

How the tax reduction is worked out

The reduction is the basic rate of tax (currently 20%) of the lowest of these three amounts:

1. finance costs: the finance costs of the tax year, plus any unused finance costs brought forward
2. property business profits: the profits of your property business in the tax year
3. adjusted total income: your income (after losses and reliefs, and excluding savings and dividend income) above your personal allowance

Example

Your finance costs for the year are £6,000. Your property profits are £10,000, and your adjusted total income is £20,000. The lowest amount is £6,000, so the reduction is 20% of £6,000: £1,200.

Unused finance costs: box 45

If the reduction is limited by your property profits or your adjusted total income, the difference is carried forward to later years. Put unused residential finance costs from earlier years of the same property business in box 45.

Where to find the figure

If the mortgage interest is not on your letting agent's statement, use the interest figure from your lender. Box 44 takes the interest and the costs of getting the loan, not repayments of the loan itself.