What Does a Property Accountant Actually Do

At Towerstone Accountants we provide specialist property accountant services for landlords property investors and individuals dealing with property tax and reporting obligations across the UK. This article has been written to explain What does a property accountant actually do in clear practical terms so you understand how the rules apply in real situations. Our aim is to help you make informed decisions avoid costly mistakes and know when professional advice is worthwhile.

As a chartered accountant running my own firm, I am often asked what a property accountant actually does. The question usually comes from landlords who assume an accountant’s role is limited to filling in a tax return once a year. In reality, a good property accountant does far more than report numbers after the event. They help shape decisions, reduce risk, improve cash flow, and stop expensive mistakes long before HMRC become involved.

Property taxation in the UK has become steadily more complex over the last decade. Changes to mortgage interest relief, Capital Gains Tax reporting rules, furnished holiday let treatment, VAT on property, and increased HMRC compliance activity mean that landlords who rely on generic advice or DIY approaches are often exposed without realising it.

In this article, I want to explain clearly and practically what a property accountant actually does, how they support landlords at different stages of ownership, and why the right advice often pays for itself many times over. This is written exactly how I explain it to clients, grounded in real world property scenarios rather than theory.

A property accountant is not just a tax return preparer

The first thing to understand is that a property accountant is not simply someone who inputs rental figures into a Self Assessment return.

A property accountant specialises in:

• Property income taxation

• Capital Gains Tax on property

• Ownership structures

• HMRC compliance

• Long term tax planning for landlords

Their role covers the full lifecycle of property ownership, not just the annual reporting.

Helping landlords choose the right ownership structure

One of the most important things a property accountant does happens before or at the point of purchase.

Ownership structure has a huge impact on tax.

A property accountant helps landlords decide whether a property should be owned:

• Personally

• Jointly with a spouse

• Through a partnership

• Via a limited company

• Through a mixed structure across a portfolio

Each option has different implications for income tax, Capital Gains Tax, inheritance tax, mortgage availability, and long term flexibility.

Getting this wrong at the start is one of the most expensive mistakes landlords make.

Advising on joint ownership and income splits

Many properties are owned jointly, especially by married couples.

A property accountant advises on:

• How rental income is taxed by default

• When HMRC apply a 50 50 split

• When Form 17 can be used

• How beneficial ownership should be documented

• How to use both spouses’ allowances legitimately

This advice is particularly valuable where one spouse pays higher rate tax and the other has unused allowances.

Structuring ownership to reduce income tax legally

A property accountant does not help clients avoid tax. They help them pay the right amount of tax.

This often involves:

• Reviewing who owns what

• Aligning ownership with income levels

• Using allowances efficiently

• Avoiding arrangements HMRC would challenge

Tax follows ownership, not effort or bank accounts, and a property accountant ensures that ownership is structured correctly and defensibly.

Calculating rental profits correctly

Calculating rental profit is not as simple as income minus costs.

A property accountant ensures that:

• Rental income is recognised in the correct period

• Advance rent is treated correctly

• Deposits are handled properly

• Letting agent statements are reconciled accurately

They also ensure that expenses are classified correctly, which is an area where many landlords make mistakes.

Distinguishing repairs from capital improvements

This is one of the most common HMRC enquiry areas.

A property accountant helps distinguish between:

• Repairs and maintenance that are deductible against rental income

• Capital improvements that are not deductible but may reduce Capital Gains Tax later

This distinction is technical, case law driven, and often misunderstood.

Getting it wrong can lead to underpaid tax, penalties, and interest.

Advising on allowable expenses and reliefs

A property accountant ensures that landlords claim everything they are entitled to, and nothing they are not.

This includes advice on:

• Letting agent fees

• Insurance

• Legal and professional fees

• Replacement of domestic items relief

• Apportionment of mixed use costs

• Home office costs where applicable

They also ensure expenses are claimed in the correct tax year.

Mortgage interest and finance cost restrictions

Since the restriction of mortgage interest relief, this area has become significantly more complex.

A property accountant:

• Applies the finance cost restriction correctly

• Calculates the basic rate tax credit accurately

• Tracks carry forward amounts

• Ensures errors do not compound year after year

Many landlords overpay tax simply because this is misunderstood or miscalculated.

Furnished Holiday Let specialist advice

Furnished holiday lets sit under a different tax regime.

A property accountant advises on:

• Whether a property qualifies as an FHL

• Availability and letting tests

• Capital allowances

• Pension contribution eligibility

• Loss treatment

• CGT reliefs linked to FHL status

HMRC closely scrutinise FHL claims, so accuracy here matters.

Airbnb and short term let tax support

Short term letting through platforms like Airbnb creates specific tax issues.

A property accountant helps with:

• Identifying the correct tax treatment

• Rent a Room relief where applicable

• VAT registration risks

• Expense allocation

• Record keeping requirements

• HMRC data matching concerns

This is an area where HMRC compliance activity is increasing rapidly.

VAT advice for property owners

VAT and property is one of the most complex areas of UK tax.

A property accountant advises on:

• When property income is VAT exempt

• When VAT applies to short term accommodation

• VAT registration thresholds

• Option to tax decisions

• VAT on property development

• VAT on commercial property sales

• Partial exemption issues

Mistakes in VAT can be extremely expensive and difficult to unwind.

Capital Gains Tax planning and calculations

A property accountant plays a critical role when a property is sold.

They advise on:

• Calculating the gain accurately

• Identifying allowable costs

• Claiming capital improvements correctly

• Using CGT allowances effectively

• Applying the correct tax rates

• Using capital losses

• Planning disposals between spouses

CGT planning works best before a sale, and a property accountant ensures opportunities are not missed.

Managing the 60 day Capital Gains Tax reporting rule

One of the biggest changes in recent years is the 60 day CGT reporting and payment requirement.

A property accountant ensures that:

• The gain is calculated promptly

• The correct return is submitted

• The estimated tax is paid on time

• Penalties are avoided

• The final position is reconciled on the tax return

This alone has saved many landlords thousands of pounds in penalties.

Supporting landlords during HMRC enquiries

Property enquiries are a major HMRC focus.

A property accountant supports landlords by:

• Acting as the main point of contact with HMRC

• Interpreting HMRC correspondence

• Managing deadlines

• Reviewing historic returns

• Preparing explanations

• Correcting errors professionally

• Negotiating penalties and interest

Trying to deal with HMRC alone often makes enquiries longer and more stressful.

Helping landlords correct past mistakes

Many landlords discover issues years after they started letting.

A property accountant helps with:

• Voluntary disclosures to HMRC

• Correcting undeclared income

• Recalculating profits accurately

• Reducing penalties through cooperation

• Bringing records up to date

Early correction is almost always cheaper than waiting for HMRC to act.

Advising on property portfolios not just single properties

As portfolios grow, complexity increases.

A property accountant helps landlords:

• Track multiple properties efficiently

• Understand overall tax exposure

• Decide which properties to sell or retain

• Sequence disposals tax efficiently

• Balance income and capital strategies

This strategic view is something most landlords cannot achieve alone.

Cash flow planning and tax forecasting

A good property accountant does not just look backwards.

They help forecast:

• Income tax liabilities

• Payments on account

• Capital Gains Tax exposure

• VAT liabilities where relevant

This allows landlords to plan cash flow rather than react to tax bills.

Advising on incorporation and restructuring

Some landlords consider incorporating their property business.

A property accountant advises on:

• Whether incorporation makes sense

• CGT and stamp duty implications

• Financing and mortgage issues

• Long term tax efficiency

• Administrative costs and obligations

Incorporation is not a simple fix, and poor advice here is very costly.

Supporting succession and long term planning

Property ownership often spans decades.

A property accountant supports:

• Retirement planning

• Passing property to family

• Inheritance tax considerations

• Long term exit strategies

• Balancing income and capital needs

This kind of planning is rarely considered early enough.

Ensuring compliance and peace of mind

One of the most overlooked benefits of a property accountant is peace of mind.

Landlords gain confidence that:

• Returns are accurate

• Tax is calculated correctly

• HMRC rules are being followed

• Deadlines are not missed

• Risks are being managed

This reduces stress and frees time to focus on the property itself.

Common misconceptions about property accountants

I often hear landlords say:

• My portfolio is too small to need an accountant

• I can just copy what others do

• My letting agent will handle the tax

• HMRC will not notice small mistakes

In practice, HMRC enquiries affect landlords of all sizes, and small errors often add up over time.

When a property accountant adds the most value

A property accountant is particularly valuable where:

• Multiple properties are owned

• Joint ownership is involved

• Income levels vary between spouses

• Furnished holiday lets are involved

• Properties are being sold

• VAT may apply

• HMRC are asking questions

• Long term planning is needed

The more complex the situation, the greater the value.

The difference between a general accountant and a property accountant

Not all accountants specialise in property.

A property accountant understands:

• Property specific tax rules

• HMRC focus areas for landlords

• Common pitfalls and enquiry triggers

• How property tax interacts with wider finances

This specialism matters, particularly as property tax rules continue to change.

Cost versus value, the real perspective

Many landlords worry about the cost of an accountant.

In reality, the cost of good advice is often far lower than:

• Overpaid tax

• Missed reliefs

• HMRC penalties

• Stress and lost time

The right accountant usually saves more than they cost.

Final thoughts from real world experience

So, what does a property accountant actually do. They do far more than complete a tax return. They act as a guide, safeguard, and strategist throughout your property journey.

In my experience, landlords who work with a good property accountant make better decisions, sleep better at night, and avoid many of the costly mistakes that catch others out. Property tax is not static, and what worked ten years ago may no longer apply today.

Property is a long term investment. Your tax strategy should be just as considered and just as long term. A property accountant helps make sure that is the case.

You may also find our guidance on How much does a property accountant cost in the UK and How can a property accountant help reduce my overall tax bill useful when exploring related property tax questions. For a broader overview of property tax reporting and planning topics you can visit our property hub which brings all related guidance together.