What Expenses Can You Claim as a Landlord?
A clear breakdown of allowable expenses for UK landlords, including repairs, insurance, agent fees, and how mortgage interest tax relief works after Section 24.
Key Actions
- List all your property-related expenses for the tax year
- Separate revenue expenses from capital improvements
- Calculate your mortgage interest tax credit at 20%
- Keep receipts and invoices for at least 5 years
- Compare the property allowance with claiming actual expenses
If you rent out property in the UK, you can reduce your tax bill by deducting allowable expenses from your rental income. Understanding what you can and can't claim is one of the most practical ways to manage your tax as a landlord.
This guide covers the main categories of deductible expenses, the mortgage interest restriction under Section 24, and how replacement of domestic items relief works.
The Basic Principle
To be deductible, an expense needs to be wholly and exclusively for the purpose of renting out the property. If something is partly personal and partly for your rental business, you can only claim the rental portion.
You report your expenses on your Self Assessment tax return, either using the SA105 (UK property) supplementary pages or through MTD-compatible software from April 2026.
Important: You can't claim expenses if you use the £1,000 property allowance instead. You need to choose one approach — see our guide on when rental income is taxable for more on this.
Running Costs You Can Claim
These day-to-day expenses are straightforward to deduct:
| Expense | Examples |
|---|---|
| Insurance | Buildings, contents, public liability, rent guarantee |
| Letting agent fees | Monthly management fees, tenant-finding fees |
| Accountancy fees | Tax return preparation, bookkeeping for rental income |
| Utilities | Water rates, council tax, gas, electricity (only periods when you pay, not the tenant) |
| Ground rent & service charges | Leasehold property costs |
| Advertising | Costs of finding tenants (online listings, signage) |
| Legal fees | For tenancy agreements and renewals under 12 months |
| Phone and stationery | Business calls to tenants, agents, tradespeople |
| Travel | Journeys to the property for inspections, repairs, or rent collection |
Travel Expenses
You can claim the cost of travelling to your rental property for legitimate business purposes. This includes:
- Visiting for inspections or maintenance
- Meeting tenants or agents
- Collecting rent or delivering keys
If you use your own vehicle, you can claim 45p per mile for the first 10,000 miles and 25p per mile after that (current HMRC approved mileage rates). Keep a log of each trip — date, purpose, and mileage.
Repairs vs Improvements
This distinction catches out many landlords. Repairs are deductible. Improvements are not.
What Counts as a Repair
A repair restores something to its previous condition. You can claim:
- Replacing a broken boiler with a similar model
- Repainting walls and woodwork
- Fixing a leaking roof
- Replacing broken windows with equivalent ones
- Replastering damaged walls
What Counts as an Improvement
An improvement is something that goes beyond the original condition. You cannot claim:
- Adding an extension or conservatory
- Converting a loft into a bedroom
- Upgrading a basic kitchen to a high-end one
- Installing central heating where there was none before
- Adding a security alarm system for the first time
The grey area: If you replace a single-glazed window with double glazing, HMRC generally treats this as a repair using modern materials — not an improvement. But adding windows where there were none is an improvement.
Example: James replaces the kitchen in his rental flat. The old kitchen had basic units and a gas cooker. He installs similar-quality replacements. This is a repair. If he installed granite worktops and integrated appliances where there were basic ones before, the additional cost would be an improvement.
Mortgage Interest (Section 24)
This is the area that most affects landlords' tax bills. Since April 2020, residential landlords can no longer deduct mortgage interest as an expense. Instead, you receive a tax credit at the basic rate (20%).
How It Works
- You calculate your rental profit without deducting mortgage interest
- You pay Income Tax on that full profit at your marginal rate
- You then receive a 20% tax credit on your mortgage interest costs
Who This Affects Most
| Taxpayer | Impact |
|---|---|
| Basic rate (20%) | No change — 20% deduction replaced by 20% credit |
| Higher rate (40%) | Significant — previously deducted at 40%, now only 20% credit |
| Additional rate (45%) | Most affected — gap between marginal rate and credit is largest |
What Finance Costs Are Covered
The 20% tax credit applies to:
- Mortgage interest payments
- Interest on loans to buy furnishings
- Overdraft interest used for the rental business
- Fees for arranging or renewing mortgages
Example: Sarah has £12,000 rental income and pays £5,000 in mortgage interest. She's a higher-rate taxpayer.
- Taxable rental profit: £12,000 (mortgage interest not deducted)
- Tax at 40%: £4,800 (assuming all her rental income falls in the higher rate band)
- Tax credit (20% of £5,000): −£1,000
- Net tax on rental income: £3,800
Before Section 24, her taxable profit would have been £7,000, and tax at 40% would have been £2,800. The restriction costs her an extra £1,000 per year.
Replacement of Domestic Items Relief
If you rent out a furnished or part-furnished property, you can claim relief when you replace household items. This replaced the old "wear and tear" allowance from April 2016.
What You Can Claim
Replacement costs for:
- Furniture — beds, sofas, tables, chairs, wardrobes
- Furnishings — curtains, blinds, carpets, lamps
- Appliances — washing machine, fridge, cooker, dishwasher
- Kitchenware — crockery, cutlery, pots, pans
The Rules
- You can only claim when replacing an existing item — not when furnishing a property for the first time
- The relief covers a like-for-like replacement. If you upgrade, you can only claim the cost of a similar item
- Deduct any money you receive for the old item (selling or part-exchanging it)
Calculation: Cost of new item + disposal costs − proceeds from old item = claimable amount
Example: A washing machine breaks down. A similar replacement costs £350. You pay £20 to have the old one removed and receive nothing for it. You can claim £370 (£350 + £20).
If you upgrade to a £600 model, you can still only claim the cost of an equivalent replacement — say £350 — plus disposal costs.
Expenses You Cannot Claim
Some costs are specifically excluded:
- Capital repayments on your mortgage (only interest qualifies for the 20% credit)
- Personal expenses — anything not related to the rental business
- Initial furnishing of a property before the first tenant
- Improvement costs — extensions, upgrades, additions
- Your own time — you can't charge for your own labour
- Clothing — even if you do repairs yourself
- Legal fees for buying or selling the property (these are capital costs)
- Fines and penalties — late filing penalties, parking fines
Pre-Letting Expenses
If you incur expenses before your first tenant moves in, you may still be able to claim them — as long as they would have been allowable if the property were already let. Common pre-letting expenses include:
- Advertising for tenants
- Safety certificates (gas, electrical)
- Insurance
- Repairs to make the property lettable
These are claimed in the first tax year that you receive rental income.
How to Record Your Expenses
HMRC doesn't ask for receipts when you file your return, but you need to keep them in case of an enquiry. For each expense, record:
- Date of the expense
- Amount paid
- What it was for — a brief description
- Receipt or invoice — digital copies are fine
Keep records for at least 5 years after the 31 January filing deadline for that tax year.
Example: For the 2025/26 tax year, your filing deadline is 31 January 2027. Keep records until at least 31 January 2032.
Multiple Properties
If you own more than one rental property, all your UK properties are treated as a single property business. This means:
- You add up all rental income and all expenses across properties
- A loss on one property can offset profit on another
- You report the net total on your tax return
This can work in your favour — if one property is being renovated and generating no income, those repair costs reduce the profit on your other properties.
Practical Checklist
At the end of each tax year, gather:
- Rental income records — bank statements showing rent received
- Mortgage statements — showing interest paid (for the 20% credit)
- Insurance certificates and receipts
- Agent statements — management and tenant-finding fees
- Repair invoices — with descriptions of work done
- Utility bills — for any periods you paid
- Travel log — dates, destinations, mileage
- Replacement items receipts — with notes on what was replaced
Frequently Asked Questions
Can I claim the cost of a new kitchen?
It depends. If you're replacing an existing kitchen with something of a similar standard, it's a repair and you can claim it. If you're upgrading — for example, fitting granite worktops where there were laminate ones — the upgrade portion is an improvement and cannot be claimed.
Can I deduct my full mortgage payment?
No. You can only claim relief on the interest portion of your mortgage, not the capital repayment. And since Section 24, that relief comes as a 20% tax credit rather than a deduction from your rental income.
What if I use a room in my rental property as an office?
If you use part of a property for your own purposes, you can only claim expenses for the rental portion. A property that's partly your home and partly rented out needs the expenses split accordingly.
Can I claim for an empty property?
Yes. If a property is temporarily vacant between tenants, you can still claim expenses like insurance, council tax, and mortgage interest during the void period — as long as the property is available for letting.
This guide is for informational purposes only and does not constitute tax, legal, or financial advice. Tax rules change frequently. Always verify current requirements on GOV.UK or consult a qualified accountant for your specific situation.