What Expenses Can Landlords Claim?
Reviewed by Neil AinsworthLast updated: July 20, 2026 4:01 pm
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Being a landlord involves more than collecting rent. From property maintenance to administration, there are ongoing costs that affect the profitability of a let. HMRC allows landlords to deduct certain expenses that are wholly and exclusively for their property business, which can reduce the taxable profit reported via Self Assessment. Understanding what you can and cannot claim helps you budget, stay compliant and avoid overpaying tax.
Typical Allowable Expenses for Landlords
Many day-to-day costs are deductible from rental income to determine your taxable profit. Below are common categories. Note: if your gross property income is modest, you may be able to use the £1,000 property allowance1 instead of claiming actual expenses, where this would produce a better result.
Property Maintenance and Repairs
Maintenance and repairs keep the property in good order and safe for tenants. Common allowable expenses include:
- General maintenance and repairs to the property (but not capital improvements)
- Replacing broken fixtures that form part of the building (for example, a boiler or built-in unit). Free-standing furniture is claimed under the Replacement of Domestic Items Relief2 rather than as a repair
- Gardening and cleaning services
- Painting and decorating, if done to maintain the property’s condition
It is important to distinguish between repairs (deductible) and improvements (capital, not immediately deductible). Initial fit-outs and additions are capital; repairs to fixtures are revenue. Replacement of free-standing domestic items is addressed separately under the Replacement of Domestic Items Relief.
Professional Fees
Landlords often incur various professional fees related to managing their rental property. Allowable professional fees include:
- Letting agent fees and management fees
- Legal fees for tenant disputes or eviction (but not costs of buying or selling a property or granting a long lease, which are capital)
- Accountant fees for preparing rental accounts or tax returns
- Surveyor or valuation fees related to the let (not acquisition or disposal work)
Using professionals can help you meet legal and tax obligations and may save time.
Insurance
Insurance protects against potential losses and liabilities associated with renting out a property. Typical insurance expenses that can be claimed include:
- Landlord insurance (covering buildings, contents and public liability)
- Rent guarantee insurance (if taken out)
- Legal expenses insurance
These policies can help manage risks such as property damage, non-payment of rent and legal challenges.
Utility Costs and Services
If the landlord pays for utilities and services, these costs can be deducted. This includes:
- Water rates, Council Tax, gas and electricity (where the landlord is liable, for example during void periods or when bills are included in the rent)
- Costs of services, such as cleaners or gardeners, as part of the rental agreement
Maintain clear records of these expenses, as they can materially reduce taxable rental profits.
Administrative Costs
The day-to-day administration of rental properties can also incur costs, which are claimable:
- Phone and broadband expenses related to managing your rental business (apportioned for business use only)
- Stationery and postage costs
- Advertising for new tenants
These communications and advertising costs are part of running a rental business and are generally allowable when wholly and exclusively for that purpose.
Travel Expenses
Travel costs incurred wholly and exclusively for managing the letting (for example, to inspect the property or deal with tenant issues) can be claimed. This includes:
- Mileage using HMRC’s approved rates or actual vehicle running costs (you must choose one method and keep records)
- Public transport fares
Keep contemporaneous logs and receipts. Any private element of a journey must be excluded.
Loan Interest and Financial Costs
Finance costs are treated differently depending on how you own the property:
- For individuals and partnerships: mortgage interest and other finance costs (including interest on loans to purchase, improve or furnish the property, and mortgage/arrangement fees) qualify for a basic-rate (20%) tax reduction rather than a deduction from rental profits
Individuals now receive a 20% tax credit for finance costs; any unrelieved finance costs may be carried forward. Companies can usually deduct finance costs in full when calculating profits (subject to the corporate interest restriction). Understanding this distinction helps with cash flow and tax planning.
Understanding Wear and Tear Allowance
Before April 2016, furnished residential lets could claim a wear-and-tear allowance. This has been replaced by the Replacement of Domestic Items Relief (RDIR). Under RDIR, you can claim the cost of replacing qualifying domestic items provided for tenants (for example, furniture, appliances and carpets). The initial cost of furnishing a property is not allowable.
Details of the Replacement Relief System
RDIR provides relief for the actual cost of a like-for-like replacement and related costs, subject to conditions:
- Costs of purchasing a new item that replaces an old one (relief is limited to the cost of a like-for-like or modern equivalent; any improvement element is not allowable, and any sale or part-exchange proceeds for the old item must be deducted)
- Costs directly connected to the replacement of the item, such as delivery, installation and disposal fees
To qualify, the item must be for the tenants’ use in a residential let and the old item must no longer be used. RDIR covers domestic items such as furniture, appliances, carpets, curtains, crockery and cutlery. It does not cover fixtures (for example, baths, sinks, or boilers), which are treated as repairs. RDIR is not available for Furnished Holiday Lettings, where capital allowances may apply.
Record Keeping for Replacement Relief
Landlords need to maintain meticulous records to claim RDIR effectively. This includes:
- Receipts and invoices for the purchase of replacement items
- Documentation of the disposal or sale of the old items (including any proceeds received)
- Details demonstrating that the new item is a replacement rather than an enhancement
Accurate records support claims made on tax returns and help if HMRC requests evidence.
Strategic Considerations
While managing property, consider the timing of replacements to optimise relief, where commercially appropriate. Planning necessary replacements within a single tax year can increase the deduction for that year.
By focusing on actual incurred costs, RDIR aligns with the practical financial management of rental properties. Regularly reviewing expenditures helps ensure that eligible claims are captured and reported correctly.
It is advisable to seek guidance from a qualified accountant or tax adviser familiar with property taxation. Tax rules can change, and their application depends on your circumstances.
A Financial Adviser Can Help
Managing the financial aspects of letting and understanding which expenses are allowable can be complex. A qualified accountant or tax adviser can help you apply HMRC rules correctly. Where you need help with regulated products (for example, buy-to-let mortgages or investment structuring), a financial adviser with relevant experience can explain your options and the associated risks.
FinancialAdvisers.co.uk can connect you with an FCA-authorised and regulated financial adviser in your area, including those familiar with property finance. They can help you understand your choices; this content is for general information only and is not advice. Tax treatment depends on your circumstances and may change.
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