Allowable expenses for rental property in the UK

What counts as an allowable expense

A cost is allowable when it keeps your rental business running and you pay it wholly and exclusively for the letting. Each pound of allowable expenses lowers your property profit by a pound, so it saves tax at the highest rate your profit reaches: 20%, 40% or 45% in England, Wales and Northern Ireland.

Two tests decide most cases. First, the cost must be a revenue cost, meaning it maintains the property or runs the letting, rather than a capital cost that buys the property or adds something new to it. Second, it must be for the rental business alone. A cost with a private purpose mixed in, such as a trip that combines a property visit with a family outing, is not allowable.

The expenses landlords most often claim

Most landlords' costs fall into the categories below, which match the checklist in our calculator. Add up what you paid in the tax year, from 6 April to 5 April, and enter the total as your expenses.

Letting agent and management fees

Fees you pay an agent to find tenants, collect rent or manage the property.

Repairs and maintenance

Work that puts the property back to how it was, such as fixing a boiler or repainting. Improvements and extensions do not count.

Landlord insurance

Buildings, contents and rent guarantee insurance for the let property.

Council tax and utilities you pay

Council tax, gas, electricity and water you pay for the let property, not bills your tenant pays.

Ground rent and service charges

Ground rent and service charges on a leasehold property you let out.

Accountancy fees

Fees for preparing your property accounts and the property pages of your tax return.

Replacing furniture and appliances

Replacing a sofa, fridge or carpet like for like, minus anything you got for the old one. First purchases do not count.

Legal and professional fees

Fees for lets of a year or less, renewing a lease under 50 years, or chasing unpaid rent. Buying costs do not count.

Travel to the property

Journeys you make only to visit, inspect or repair the let property.

Advertising for tenants

Listing fees, adverts and photographs used to find new tenants.

GOV.UK also lists the costs of services you pay for, including the wages of gardeners and cleaners, public liability insurance, rent you pay if you sub-let, and direct costs such as phone calls and stationery for the letting. Water rates, council tax, gas and electricity only count when you pay them. Bills your tenant pays are not your expenses.

Repairs versus improvements

A repair that puts the property back to how it was is an allowable expense; an improvement that adds to or upgrades the property is a capital cost and cannot be taken off your rent. Replacing something with a broadly equivalent version still counts as a repair, even if the new materials last longer. If the change makes a significant improvement, the whole cost is capital.

Usually allowable as repairs

• Fixing a boiler, a leaking roof or broken guttering.
• Repainting and redecorating between tenants.
• Replacing single glazed windows with double glazing, which HMRC treats as a repair because the windows do the same job.

Capital costs you cannot deduct

• The price of buying the property, and the legal fees and other costs of buying it.
• Adding an extension.
• Installing a security system where there was not one before.
• Replacing a kitchen with one of a higher specification.
• Putting a run-down property you have bought into good order. Repairs are not ruled out only because you carry them out soon after buying, where the price only reflected normal wear and tear.

Keep records of capital costs even though they do not reduce your income tax. GOV.UK notes you may be able to set them against Capital Gains Tax when you sell the property.

Replacing furniture and appliances

When you replace a domestic item you provide for your tenant, you can deduct the cost of a like-for-like replacement through replacement of domestic items relief. Domestic items are things such as furniture, furnishings, household appliances and kitchenware.

• Only replacements qualify. The first sofa, fridge or bed you buy for a property is not deductible.
• Fixtures that are part of the building, such as baths, washbasins, toilets and built-in storage, are not domestic items. Replacing them is judged under the repairs and improvements rules above.
• If you upgrade, for example replacing a basic fridge freezer with a far more expensive model, the deduction is limited to what a like-for-like item would have cost.
• Add the costs of delivering and installing the new item and disposing of the old one, and take off anything you receive for selling the old item.
• The relief is not available if you claim the property allowance or Rent a Room relief for that income.

Mortgage interest and capital repayments

Mortgage interest is not an allowable expense for individuals who let residential property; you get a tax reduction of 20% of your finance costs instead, rising to 22% from 6 April 2027. Finance costs include mortgage interest, interest on loans to buy furnishings, and fees for getting or repaying a loan.

Leave finance costs out of your expenses total. The calculator asks for them separately, because the reduction is limited by your profit and your income, cannot create a refund, and any unused amount carries forward to later years. The rules and limits are set out in the guide to Section 24 mortgage interest relief.

The capital part of your mortgage repayments, the amount that reduces what you owe, has never been deductible and earns no tax reduction. If you have a repayment mortgage, check your annual mortgage statement to separate the interest from the capital. The Section 24 restriction does not apply to property held by a company or to commercial property.

Travel and vehicle costs

You can claim travel only for journeys made purely for your rental business, and vehicle running costs only for the proportion of use that is for the letting.

• Travel between your let properties for the business is allowable, as is travel from home to a property when the only purpose is business, such as an inspection or meeting a tradesperson.
• A journey that is partly private, such as calling at the property on the way to visit friends, is not allowable.
• If you use a car or van for both business and private journeys, split the running costs on a mileage basis.
• Instead of working out actual costs, you can use HMRC's simplified mileage rates for your business miles.
• The cost of buying a vehicle is capital and is not an expense, although capital allowances may be available.

Keeping records

Keep evidence of every expense you claim for at least 5 years after the 31 January tax return deadline for that tax year. HMRC can ask to see it, and a cost you cannot support may be disallowed.

GOV.UK lists rent books, receipts, invoices, bank statements and mileage logs for journeys made solely for your property business. Keep a note of what each cost was for, so you can show whether it was a repair or an improvement, and keep records of capital costs for Capital Gains Tax. If Making Tax Digital for Income Tax applies to you, you will need to keep your records digitally, as explained in Making Tax Digital for landlords.