Section 24 changes the way income tax is calculated on property income. Before, and in accordance with GAAP (Generally Accepted Accounting Principles), your taxable income was calculated on a simple INCOME – COSTS calculation, whereas now taxable income for landlords is more INCOME – ONLY CERTAIN COSTS
BUT
The difference is that a 20% relief rate is added. So for lower rate tax payers, they lose their 20% income tax relief on the mortgage interest payments, then are given it back (meaning no difference).
Higher and top rate tax payers lose their 40 – 45% relief, then get 20% instead. It is this 20 – 25% difference that is the real impact of Section 24.
A word of warning though. If you are a lower rate tax payers close to the higher-rate threshold, the increase in your taxable income that comes with the way Section 24 is calculated could put you in the higher rate income tax band, at which point you will become affected by this, although it is unlikely to be to any great extent.