Landlord Tax Deductible Expenses: What You Can and Cannot Claim
A landlord can deduct any cost incurred wholly and exclusively for renting out the property, in the year it is incurred, from rental income. That covers repairs, letting agent fees, insurance, certificates, licence fees and accountants. It does not cover improvements, mortgage capital or, for individual landlords, mortgage interest, which gets a 20 percent tax credit instead. This guide lists what HMRC allows, where the line between repair and improvement falls, how to claim for replacing furniture, and when the £1,000 property allowance beats claiming expenses.
In this guide
Allowable expenses Repairs versus improvements Replacing furniture and appliances The £1,000 property allowance Losses and timing Worked example Frequently asked questions SourcesAllowable expenses
| Expense | Deductible? | Notes |
|---|---|---|
| General maintenance and repairs | Yes | Restoring the property to its previous condition |
| Water rates, council tax, gas and electricity | Yes, if you pay them | For example during voids, or bills included in the rent |
| Landlord insurance | Yes | Buildings, contents and rent guarantee cover |
| Letting agent and management fees | Yes | Tenant-find, management and renewal fees |
| Legal fees | Yes, for lets of under a year or renewing a lease of under 50 years | Purchase legal fees are capital |
| Accountant fees | Yes | Including Making Tax Digital software |
| Ground rent and service charges | Yes | For leasehold flats |
| Cleaning and gardening | Yes | Paid services for the let property |
| Vehicle running costs | Business proportion only | Trips to the property, not personal use |
| Gas safety checks, EICRs, EPCs, licence fees, database fee | Yes | Costs of meeting letting rules |
| Mortgage interest and finance costs | No, for individuals | 20 percent tax credit under section 24 |
| Mortgage capital repayments | No | Never deductible |
| Improvements and enhancements | No | Capital; may reduce the gain on sale |
| Private calls, personal clothing, own time | No | Not wholly for the letting |
HMRC, Income Tax when you rent out a property: working out your rental income (updated 19 March 2025), checked 3 October 2026. Compliance costs are allowable under the wholly and exclusively test.
The compliance costs on this site are all revenue expenses: the gas safety check, the EICR and any remedial work to restore the installation, an EPC, a legionella assessment, HMO and selective licence fees, and the £65 per property database fee from December 2026. The certificate cost calculator gives the annual figure to claim.
Repairs versus improvements
HMRC's rule is that enhancements or improvements which are capital expenditure cannot be deducted. The test is whether the work restores what was there or adds something new. Replacing a worn part with its nearest modern equivalent is a repair even if it performs better: replacing single glazing with double glazing, or an old boiler with a modern condensing one, is generally treated as a repair. Adding something the property never had is an improvement: an extension, a loft conversion, insulation where there was none, or a heat pump replacing a gas boiler.
| Job | Usually | Why |
|---|---|---|
| Replace a broken boiler with a modern equivalent | Repair | Like-for-like function |
| Re-roof with the same type of covering | Repair | Restores the asset |
| Replace single glazing with double glazing | Repair | Nearest modern equivalent |
| Fit loft insulation where there was none | Improvement | Adds something new |
| Add an en-suite to let a room at a higher rent | Improvement | Enhances the property |
| Fire doors and alarms to meet an HMO licence | Depends | Replacing doors like for like is a repair; adding a new system may be capital |
General principles from HMRC guidance and its property income manual. Mixed jobs can be split; ask an accountant about anything large.
Capital spending is not wasted: costs still reflected in the property when you sell reduce the capital gain. Keep the invoices with the deeds. The EPC C guide covers how energy upgrades are taxed.
Replacing furniture and appliances
Replacement of domestic items relief, available since 6 April 2016, lets you deduct the cost of replacing movable furniture, furnishings, household appliances and kitchenware in a let dwelling. The conditions:
- the old item is replaced by a new one, and the old one is no longer available to the tenant;
- the new item is provided for the tenant's exclusive use;
- the claim is the cost of the new item plus disposal costs, less anything you got for the old one;
- the first furnishing of a property is not covered.
A like-for-like replacement is the full cost; an upgrade (a dishwasher replacing a washing machine, say) is limited to the cost of the equivalent item.
The £1,000 property allowance
Individuals get £1,000 a year of property income tax free. You can use it instead of claiming expenses, but not as well: HMRC says that if you claim the property allowance you cannot deduct your expenses. It suits someone with a little income from a parking space or a room let, not a landlord with a mortgaged buy-to-let, whose real costs are almost always more than £1,000.
Losses and timing
If expenses exceed rent, the loss is carried forward and set against future profits from the same property business; it cannot normally be set against salary. Many landlords use the cash basis, recording income and expenses when money changes hands. A big repair in a void year produces a loss you use in later years.
Worked example
| Item | Amount | Deductible |
|---|---|---|
| Rent received | £14,400 | |
| Letting agent, 12 percent | £1,728 | £1,728 |
| Landlord insurance | £320 | £320 |
| Gas safety check and EICR (one-fifth of a £300 EICR) | £150 | £150 |
| Boiler repair | £450 | £450 |
| Replacement sofa | £600 | £600 |
| New loft insulation | £500 | £0, capital |
| Mortgage interest | £6,000 | £0; 20 percent credit of £1,200 |
| Taxable profit | £11,152 |
Illustrative. The EICR is shown at one-fifth for comparison; in practice it is deducted in the year it is paid.
At basic rate that is £2,230 of tax less the £1,200 credit, £1,030. The rental yield calculator and the running-cost guide put these lines together, and the section 24 guide explains the interest credit.
Frequently asked questions
What expenses can landlords claim?
Costs incurred wholly and exclusively for the letting: repairs and maintenance, insurance, agent and management fees, accountant fees, ground rent and service charges, bills you pay, cleaning and gardening, certificates and licence fees, and the business share of travel.
Can I claim mortgage interest as an expense?
Not as an individual. Since 6 April 2020 you get a tax reduction of 20 percent of the interest instead. A limited company can deduct interest as an expense.
Is a new boiler a repair or an improvement?
Replacing an old boiler with a modern equivalent is usually a repair and deductible. Replacing a gas boiler with a heat pump, or adding central heating where there was none, is usually an improvement and capital.
Can I claim for replacing furniture?
Yes, under replacement of domestic items relief: the cost of a like-for-like replacement plus disposal costs, less anything received for the old item. The first furnishing of a property is not covered.
Should I use the £1,000 property allowance?
Only if your real expenses are under £1,000. If you claim the allowance you cannot deduct any expenses, so most buy-to-let landlords are better off claiming actual costs.
Sources
HMRC: Income Tax when you rent out a property: working out your rental income, updated 19 March 2025; HMRC Property Income Manual; tax-free allowances on property and trading income. Checked 3 October 2026. See the methodology.