Buying guide
Interest deductibility on rental property explained
The laws are changing so we’ve got up to date answers to make life easier.
AI summary
The government is reintroducing interest deductibility for rental property mortgage costs, reversing the previous phase-out policy. Landlords can now claim a percentage of their interest expenses against their rental income.
The phased reintroduction is as follows:
- 2023/24 tax year: 60% deductible
- 2024/25 tax year: 80% deductible
- 2025/26 tax year: 100% deductible
Additionally, the bright-line test has been shortened to two years. Landlords should consult a tax accountant to navigate these changes and ensure compliance.
But first, what is interest deductibility on rental property?
Current rules — what's deductible now?
There are tax advantages to owning a new build property.
Other changes for investors to note
Should I be doing anything now?
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