What expenses can landlords claim against tax?

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 expenses can landlords claim against tax 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.

This is one of the most important questions for any landlord, and it is also one of the areas where I see the most confusion. Some landlords underclaim because they are worried about getting it wrong, while others overclaim without realising certain costs are not allowed. Both approaches can be expensive in different ways.

HMRC allows landlords to deduct a wide range of expenses when calculating rental profit, but only if those expenses meet specific rules. The key is understanding what counts as an allowable expense, what does not, and how different types of costs are treated for tax purposes.

In this article, I am going to explain clearly and practically what expenses landlords can claim against tax in the UK. I will cover the most common allowable costs, the areas that cause the most mistakes, how mortgage interest is treated under current rules, and how to approach record keeping so you stay compliant and confident.

By the end, you should have a clear picture of what you can claim, what you cannot, and why.

The basic rule HMRC applies to landlord expenses

HMRC’s starting point is straightforward in principle.

To be deductible, an expense must be:

• Wholly and exclusively incurred for the purpose of renting out the property

If a cost is partly personal and partly related to the rental business, only the business portion can be claimed.

This rule applies to all landlord expenses, regardless of property type or ownership structure.

Expenses landlords can usually claim in full

Most allowable landlord expenses fall into the category of revenue expenses, meaning they relate to the day to day running and maintenance of the rental property.

These expenses are generally deducted in full in the year they are incurred.

Letting agent and property management fees

Letting agent fees are one of the most common allowable expenses.

You can usually claim:

• Tenant find fees

• Ongoing management fees

• Rent collection fees

• Renewal fees

• Inventory and check in fees

As long as the fees relate to the rental business, they are fully deductible.

Repairs and maintenance

Repairs and maintenance are also fully allowable, provided they are genuine repairs rather than improvements.

Common examples include:

• Fixing leaking roofs

• Repairing boilers and heating systems

• Plumbing and electrical repairs

• Replacing broken tiles or flooring

• Repainting due to wear and tear

• Fixing doors, locks, and windows

• Gutter and drain repairs

The key test is whether the work restores the property to its previous condition rather than improving it beyond that condition.

Replacements that still count as repairs

HMRC accepts that replacing items with modern equivalents is still a repair.

For example:

• Replacing an old boiler with a modern efficient boiler

• Replacing single glazing with double glazing

• Replacing wooden windows with UPVC

These are usually allowable because they restore the function of the property, even if materials have improved over time.

Replacement of domestic items relief

Residential landlords can claim a specific deduction for replacing domestic items provided for tenants.

This covers items such as:

• Beds and mattresses

• Sofas and chairs

• Tables and wardrobes

• Carpets and rugs

• Curtains and blinds

• Fridges, freezers, ovens, and washing machines

You can deduct the cost of replacing these items, but not the original purchase cost, and not any element that represents a significant upgrade beyond a reasonable modern equivalent.

Buildings and contents insurance

Insurance premiums relating to the rental property are allowable.

This usually includes:

• Buildings insurance

• Landlord insurance

• Contents insurance for furnished properties

• Public liability insurance

These costs are seen as necessary for protecting the rental business.

Council tax and utilities paid by the landlord

If you pay council tax or utility bills for the property, you can usually claim them as expenses.

This often applies when:

• The property is empty between tenants

• Bills are included in the rent

• The landlord remains responsible under the tenancy

If the tenant pays these costs directly, they are not your expense and cannot be claimed.

Ground rent and service charges

For leasehold properties, landlords can usually claim:

• Ground rent

• Service charges

• Maintenance charges for communal areas

However, any element of service charges that relates to capital improvements or sinking funds is usually not deductible as an expense.

Legal and professional fees

Certain legal and professional fees are allowable.

These typically include:

• Accountant fees relating to rental accounts and tax returns

• Legal fees for drawing up tenancy agreements

• Legal costs for evicting tenants or recovering rent

• Surveyor fees relating to repairs

Legal fees connected to buying or selling a property are not deductible as rental expenses, as they are capital in nature.

Advertising and marketing costs

Costs incurred to find tenants are allowable.

This includes:

• Online advertising

• Listing fees

• Photography for property listings

• Sign boards

These are all considered part of running the rental business.

Travel and mileage costs

You can usually claim travel costs incurred wholly and exclusively for managing your rental property.

Examples include:

• Travelling to inspect the property

• Visiting agents or contractors

• Attending meetings related to the rental

For car travel, you can normally claim mileage at HMRC’s approved rates, provided journeys are properly recorded.

Personal travel cannot be claimed.

Office and administration costs

Landlords can claim reasonable administration costs, including:

• Stationery

• Postage

• Phone calls related to the rental business

• Software used for record keeping

If you work from home managing your properties, you may be able to claim a proportion of household costs, provided the apportionment is reasonable.

Accountancy and bookkeeping costs

Professional fees for managing your rental accounts are allowable.

This includes:

• Accountant fees

• Bookkeeping costs

• Tax return preparation fees related to property income

Fees relating to personal tax advice or non rental matters may need to be excluded or apportioned.

Expenses that are restricted or treated differently

Not all landlord costs are deducted in the same way. Some are restricted or treated separately under current tax rules.

Mortgage interest and finance costs

Mortgage interest is one of the biggest changes landlords have had to adapt to.

For individual landlords:

• Mortgage interest is not deducted as an expense

• Rental profit is calculated before interest

• A tax credit is given at 20 percent of the interest paid

This means interest still gives tax relief, but it does not reduce rental profit itself.

For landlords operating through limited companies, mortgage interest is usually fully deductible.

Capital improvements and renovations

Costs that improve the property rather than maintain it are not deductible as rental expenses.

Examples include:

• Extensions

• Loft conversions

• Adding an extra bathroom

• Major upgrades that increase the property’s value

These are capital costs and may be relevant for Capital Gains Tax when the property is sold, but they are not deducted against rental income.

Initial repairs before first letting

Repairs carried out before a property is first let are often not deductible.

If you buy a property in poor condition and carry out work to make it fit to rent, HMRC may treat those costs as part of the property’s acquisition cost rather than as allowable expenses.

Timing and context are critical here.

Personal expenses

Personal costs cannot be claimed, even if they are loosely connected to the property.

This includes:

• Personal travel

• Clothing

• Personal phone use

• Private home costs not reasonably apportioned

HMRC looks closely at mixed use expenses.

Expenses for mixed use properties

If a property is partly rented and partly used personally, expenses must be apportioned.

For example:

• Renting out a room in your home

• Living in part of the property

Only the rental portion of costs can be claimed, and the apportionment must be reasonable and consistent.

Expenses during empty periods

You can usually still claim expenses when a property is empty, provided it is genuinely available to let.

This includes:

• Insurance

• Council tax

• Repairs

• Letting agent fees

If the property is withdrawn from the rental market or used privately, claims may need to be restricted.

Record keeping, essential for landlords

HMRC expects landlords to keep clear and accurate records.

You should retain:

• Invoices and receipts

• Bank statements

• Mileage logs

• Notes explaining repairs

• Tenancy agreements

Good records not only support your claims, they make calculating rental profit far easier.

Cash basis versus accruals basis

Most individual landlords use the cash basis, meaning:

• Income is taxed when received

• Expenses are deducted when paid

Some landlords use the accruals basis, which matches income and expenses to the period they relate to.

The choice affects timing but not what is fundamentally allowable.

Common mistakes landlords make

In practice, I see the same errors repeatedly.

These include:

• Claiming improvements as repairs

• Deducting mortgage capital repayments

• Forgetting to claim allowable expenses

• Failing to apportion mixed use costs

• Poor record keeping

Both overclaiming and underclaiming can cause problems.

How allowable expenses reduce your tax bill

Allowable expenses reduce your rental profit.

Lower rental profit means:

• Lower Income Tax

• Lower impact on tax bands

• Potential reduction in other charges such as Child Benefit clawback

This is why understanding what you can claim is so important.

Limited company landlords

If the property is owned through a limited company, many of the same principles apply, but:

• Mortgage interest is usually deductible

• Expenses reduce Corporation Tax rather than Income Tax

The repair versus improvement distinction still applies in full.

How I advise landlords in practice

When reviewing landlord expenses, I focus on:

• Ensuring all allowable costs are claimed

• Ensuring claims are defensible

• Separating repairs from improvements

• Reviewing finance cost treatment

• Making sure records support the position

The aim is always to claim everything you are entitled to, but nothing you are not.

Why getting expenses right matters

Correctly claiming expenses:

• Reduces your tax bill

• Keeps you compliant with HMRC

• Reduces stress if HMRC ever asks questions

• Gives you a clearer picture of true profitability

Mistakes can be costly in both directions.

Final thoughts

Landlords can claim a wide range of expenses against tax, from letting agent fees and repairs through to insurance, professional fees, and replacement of domestic items. The key is understanding the difference between revenue expenses and capital improvements, and applying HMRC’s rules consistently.

In simple terms, if a cost is incurred wholly and exclusively for running and maintaining your rental property, it is usually deductible. If it improves the property or relates to buying or selling it, it is usually not.

In my experience, landlords who understand what they can claim feel far more in control of their tax position, even if the tax bill itself does not disappear. Clarity leads to confidence, and confidence leads to better decisions.

If you are ever unsure about a particular expense, especially where large sums are involved, getting advice before submitting your tax return is almost always easier than correcting things after HMRC has already taken an interest.

You may also find our guidance on How do mortgage interest rules affect landlords and What records do landlords need to keep for tax 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.