BTL (Buy-to-Let)
A mortgage product and business model where a property is purchased specifically to rent out. Buy-to-let landlords are subject to Section 24 of the Finance Act 2015, which replaced mortgage interest relief with a 20% tax credit. Stamp duty is higher on a second property.
At a glance
- Mortgage interest
- 20% tax credit only (Section 24, FA 2015)
- SDLT surcharge
- 5% on BTL purchases (rising in 2026)
- Regulator
- FCA for consumer BTL; otherwise unregulated
Full guide
Read the complete landlord guide on BTL (Buy-to-Let)
Deadlines, fines and step-by-step compliance in our in-depth resource.
Open full guideWhy BTL (Buy-to-Let) matters for landlords
Buy-to-let is the default business model for the vast majority of UK landlords, but the tax and regulatory backdrop has shifted sharply since 2015. Section 24 of the Finance Act 2015 stripped higher-rate relief on mortgage interest and replaced it with a 20% tax credit, changing the math for any leveraged portfolio. Add the stamp duty surcharge, HMRC MTD for Income Tax and new SDLT bands for 2026 and a spreadsheet built pre-2017 is almost certainly producing the wrong post-tax return.
Official sources
LetCompliance editorial reviews this entry every quarter against the sources above. Always confirm specific duties with a qualified solicitor or your local council.
Related terms
Capital Gains Tax (CGT)
Tax on the profit from selling a rental property. From April 2024 the CGT annual exempt amount was reduced to £3,000 and residential property gains are taxed at 18% (basic rate) or 24% (higher rate). A CGT return must be filed and tax paid within 60 days of completion.
Stamp Duty Land Tax (SDLT)
Tax on property purchases in England and Northern Ireland. Buy-to-let purchases above £40,000 incur a 5% surcharge on top of the standard rates (rising to higher in 2026). Check HMRC for current bands.
Break Clause
A clause in a fixed-term tenancy that allows landlord or tenant to end the agreement early. With fixed-term ASTs abolished from 1 May 2026 for most residential tenancies, break clauses are rarely relevant, a tenant can instead end a periodic tenancy with two months' notice.
Accelerated Possession
A fast-track court procedure used under a Section 21 notice in England and Wales. Abolished for new claims from 1 May 2026 because Section 21 no longer exists. Possession is now pursued under Section 8 using a specified ground.
AST (Assured Shorthold Tenancy)
The most common form of private tenancy in England. From 1 May 2026 all existing ASTs converted to assured periodic tenancies under the Renters Rights Act 2025, and new fixed-term ASTs can no longer be created for most residential lets.
Arrears (Rent Arrears)
Unpaid rent that is past its due date. Ground 8 of Schedule 2 to the Housing Act 1988 (mandatory) requires at least 3 months of rent arrears under the Renters Rights Act 2025 (previously 2 months). Grounds 10 and 11 remain as discretionary grounds.