Maximizing your allowable expenses is one of the most effective ways to reduce your tax bill as a landlord. HMRC allows you to deduct certain costs from your rental income, reducing your taxable profit and therefore your tax liability. This guide provides a comprehensive breakdown of what you can claim.
For a complete overview of property tax obligations, see our main Property owners and landlords page.
The Golden Rule: Wholly and Exclusively
As with all business expenses, the costs you claim must be incurred wholly and exclusively for the purpose of your rental business. If an expense has a dual purpose (business and personal), you can only claim the business portion.
What Expenses Can Landlords Claim?
1. Repairs and Maintenance
You can claim the cost of repairs and maintenance to the property. This includes:
- Routine repairs: Plumbing, electrical, and general wear and tear.
- Decorating: Redecorating between tenancies.
- Replacement of fixtures: Replacing bathroom fittings, kitchen units, or carpets.
- External repairs: Roof repairs, guttering, and exterior painting.
Important: You cannot claim for ‘improvements’ — work that adds value or changes the character of the property. These are capital expenses and may qualify for capital allowances instead.
2. Insurance
You can claim premiums for:
- Building insurance.
- Contents insurance.
- Landlord liability insurance.
- Rent guarantee insurance.
- Legal protection insurance.
3. Professional Fees
You can claim fees paid to professionals for services related to your rental property.
- Accountant fees: For preparing your tax return.
- Letting agent fees: For finding tenants and managing the property.
- Legal fees: For legal advice (though some fees, like those for buying a property, are capital).
- Survey fees: For property surveys (unless it’s for purchase).
4. Utilities and Services
If you pay the utilities or other services for the property, you can claim them:
- Electricity and gas.
- Water and sewerage.
- Council tax (if you pay it).
- Broadband and telephone (if provided to tenants).
- Cleaning and gardening services.
5. Travel and Vehicle Costs
You can claim travel costs to visit and manage your property. This includes:
- Mileage: 45p per mile for the first 10,000 business miles, 25p thereafter. See our guide: Mileage Claims.
- Public transport: Train, bus, and taxi fares.
- Parking and tolls.
6. Ground Rent and Service Charges
For leasehold properties, you can claim ground rent and any service charges paid to the freeholder or management company.
7. Advertising and Marketing
Costs to find tenants are deductible:
- Online advertising (e.g., Rightmove, Zoopla).
- Estate agent fees for advertising.
- Costs of professional photography.
8. Capital Allowances
You can claim capital allowances on certain items:
- Fixtures and fittings: Built-in kitchen units, bathroom suites, heating systems.
- Furniture: In furnished or partly-furnished properties (claimable over time as wear and tear).
Note: The replacement of domestic items relief (e.g., replacing a bed or washing machine) is no longer available for expenditure incurred on or after 6 April 2016.
9. Legal Costs for Evictions
If you need to evict a tenant, the legal costs are deductible.
10. Interest on Loans (Not for Residential Property)
As covered in the mortgage interest relief guide, you claim a tax credit for finance costs on residential properties, not a deduction from rental income. For commercial properties or furnished holiday lets, you can still deduct the full interest. See our guide: Mortgage Interest Relief for Landlords.
What You Cannot Claim
- Capital improvements: Work that adds value (e.g., building an extension).
- Personal costs: Any costs that are not related to the rental business.
- Fines and penalties: Fines from HMRC or other bodies.
- Depreciation: The cost of the property itself (land and buildings).
The Property Allowance: An Alternative
If your gross rental income is under £1,000, you don’t need to declare it. If it’s between £1,000 and £10,000, you can choose to claim the Property Allowance instead of deducting actual expenses. This is a tax-free allowance of £1,000, but you cannot claim any other expenses if you use it. See our guide: Rental Income Tax Guide.
Record Keeping
To claim expenses, you must keep good records. HMRC expects you to keep:
- Receipts for all expenses over £10.
- Invoices for professional services.
- Bank statements.
- Mileage logs for travel.
You must keep these records for at least 5 years from the 31 January filing deadline of the tax year they relate to. For more on this, see our guide: Record Keeping for Self-Employed.
How We Can Help
Our ACCA-qualified accountants can review your expenses and ensure you claim everything you are entitled to. We can also advise on the Property Allowance and record-keeping requirements.
Maximise your deductions. Let us handle your landlord tax return.
📚 Related Guides
• Property owners and landlords
• Mileage Claims
• Mortgage Interest Relief for Landlords
• Rental Income Tax Guide
• Landlord Tax Return Guide
• Record Keeping for Self-Employed
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