Landlords can deduct a range of expenses from their rental income before calculating their taxable profit. The core rule is that expenses must be incurred "wholly and exclusively" for the rental business and must be revenue (not capital) in nature. Improvements to a property are capital expenditure and cannot be deducted as revenue expenses (though they reduce Capital Gains Tax when you sell).

Letting agent and management fees

  • Letting agent fees (typically 8 to 15% of rent)
  • Property management fees for ongoing management
  • Inventory check-in and check-out fees
  • Tenant-finding fees (one-off)

Property maintenance and repairs

  • Routine repairs (fixing a leaking roof, replacing a broken boiler, repainting worn surfaces)
  • Decorating between tenancies (to restore original condition)
  • Plumbing and electrical repairs
  • Replacing like-for-like fixtures (a damaged window, a broken door)
Repairs vs improvements

Replacing a single-glazed window with double glazing is an improvement and is not deductible as a revenue expense. Replacing a double-glazed window with a like-for-like double-glazed unit is a repair and is deductible. The distinction matters and is often queried by HMRC.

Insurance

  • Buildings insurance premiums
  • Contents insurance (for furnished lets)
  • Landlord liability insurance
  • Rent guarantee insurance
  • Legal expenses insurance

Professional and legal fees

  • Accountant fees for preparing rental accounts and tax returns
  • Solicitor fees for preparing tenancy agreements (not for purchasing the property)
  • Debt recovery costs for unpaid rent
  • Court costs for eviction proceedings

Council tax and utilities

  • Council tax paid by the landlord during voids or when included in the rent
  • Gas, electricity, and water if paid by the landlord
  • Broadband if provided as part of the tenancy

Mortgage interest (tax credit, not deduction)

Since April 2020, mortgage interest is no longer a deductible expense. Instead, you receive a 20% Income Tax credit on the full interest amount. See our Section 24 guide for full details of how this works.

Replacement of domestic items (furnished lets)

You can claim the Replacement of Domestic Items Relief for furnished rental properties. This allows you to deduct the cost of replacing items such as sofas, beds, white goods, carpets, and curtains with like-for-like equivalents. You cannot claim for the initial purchase of furnishings.

What you cannot claim

  • Capital improvements (extensions, loft conversions, new kitchens where the old one was functional)
  • Your own time or labour
  • Personal expenses unrelated to the rental
  • Initial purchase costs (these reduce CGT but are not revenue expenses)
  • Wear and tear allowance (abolished in April 2016 and replaced with the Replacement of Domestic Items Relief)
Disclaimer

This guide is for general information only. Property taxation is complex and frequently changes. Always consult a qualified tax adviser or accountant before making decisions. Find one via our accountant directory.