What can you claim? A landlord's guide to tax and expenses

Rental income is taxable, but the tax is calculated on profit rather than the total rent received. Understanding which costs can be deducted from your rental income before you calculate your tax bill is one of the most practically useful areas of landlord finance to get right. HMRC's guidance on rental income sets out the framework clearly: to be allowable, an expense must be incurred wholly and exclusively for the purposes of your rental business. Personal costs, or costs that serve a dual purpose, are either excluded or apportioned.

The categories of allowable expense

Repairs and maintenance are among the most commonly claimed allowable expenses. Repainting between tenancies, fixing a broken boiler, repairing gutters, and replacing a damaged window all qualify, provided the work restores the property to its previous condition rather than improving it beyond that. This distinction between repair and improvement is important. Replacing a kitchen with a comparable equivalent is a repair. Installing a kitchen of a meaningfully higher specification is an improvement, which is a capital expenditure rather than a revenue cost and is treated differently for tax purposes.

Insurance premiums paid by the landlord are fully allowable. This includes buildings insurance, contents insurance for furnished lets, landlord liability insurance, rent guarantee insurance, and legal expenses insurance. All must relate to the rental property.

Letting agent fees, management fees, tenant-finding costs, advertising, and inventory check fees are all allowable. If you use an agent to manage a property on a full management basis, the management fee is deductible in full. Accountancy fees specifically for preparing your rental income tax return are also allowable.

Safety certificates, including the annual Gas Safety Certificate, Electrical Installation Condition Reports, and Energy Performance Certificates, are allowable expenses as they are incurred wholly for the purpose of the letting business.

Council tax and utility bills are allowable where the landlord pays them, which may include void periods when the property is empty between tenancies.

Ground rent and service charges on leasehold properties are allowable. Travel costs to the property for business purposes, such as for an inspection or to supervise repairs, are allowable on a reasonable basis.

For furnished lettings, the cost of replacing domestic items such as beds, sofas, white goods, and carpets on a like-for-like basis is allowable under the replacement of domestic items relief. The cost of the initial provision of those items when a property is first furnished is not deductible in the same way.

What you cannot claim

Capital expenditure, meaning costs that improve the property beyond its original condition or extend its useful life, cannot be deducted from rental income. These may be relevant for capital gains tax purposes when the property is eventually sold, but they do not reduce income tax in the year they are incurred.

Mortgage capital repayments cannot be claimed as an expense at any point.

Mortgage interest and the Section 24 restriction

Since 2020, individual landlords in England have not been able to deduct mortgage interest directly from rental income. Instead, a 20% tax credit is applied against the tax liability. This means higher and additional rate taxpayers receive proportionally less relief on their finance costs than basic rate taxpayers. Landlords who hold property through a limited company structure are not subject to this restriction and can continue to deduct mortgage interest in full, though company ownership involves different tax considerations overall.

Keeping records

HMRC requires landlords to retain receipts, invoices, and bank statements supporting all expenses claimed. Without evidence, HMRC can disallow a claim during an enquiry. From April 2026, landlords with gross rental and self-employment income above £50,000 are required to keep digital records under Making Tax Digital.

Where you are uncertain whether a cost qualifies, professional accountancy advice is itself an allowable expense.

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