What expenses can I claim as a landlord?

Becoming a landlord comes with various running costs and expenses.

Understanding which expenses are allowable for tax purposes is vital to ensure you pay the correct amount of tax and remain compliant.

Allowable Day-to-Day Expenses

To qualify for tax relief, expenses must be incurred 'wholly and exclusively' for rental purposes. Common allowable costs include:

• Insurance (landlord policies for buildings, contents, and liability)
• Letting agent and management fees
• Ground rent and service charges
• Council tax and water rates (if not paid by tenants)
• General property maintenance and repairs (not improvements)
• Utilities (gas, electricity) where applicable
• Restricted mortgage interest relief
• Rent guarantee insurance
• Safety checks and compliance costs (Gas Safety Certificates, EPCs, smoke and carbon monoxide alarms)
• Legal fees for eviction or lease renewals (up to 50 years)
• Cleaning services (including end-of-tenancy and communal areas)
• Wages for gardeners or cleaners
• Accountant fees
• Direct costs like phone calls, stationery, postage, and advertising for new tenants

Part Expenses and Mixed Use Costs

If an expense is partly for personal use, only the proportion used for your property business is deductible. For vehicle costs, you can either claim:

• A flat rate of 45p per business mile (25p after 10,000 miles), or
• A proportional share of total car expenses (insurance, fuel, repairs) based on business mileage.

For phone bills, only the portion used for rental activities can be claimed. Landlords working from home may use simplified expense rates:

• 25–50 hours/month: £10
• 51–100 hours/month: £18
• 101+ hours/month: £26

Capital vs. Revenue Expenses

Initial purchases of capital items (e.g., white goods, furniture) for a property cannot be claimed immediately unless they qualify for specific relief. Tax relief is only available when replacing domestic items on a like-for-like basis under the 'Replacement of Domestic Items Relief'. Examples of eligible replacements include:

• Furniture (beds, wardrobes)
• Furnishings (curtains, carpets)
• Appliances (fridges, washing machines)
• Kitchenware (crockery, cutlery)

Improvements or upgrades (e.g., changing a sofa to a sofa bed) are only deductible up to the cost of an equivalent replacement.

Maintenance and Repair Costs

Allowable repair expenses include:

• Fixing storm-damaged roofs
• Replacing a broken boiler
• Repainting or redecorating between tenancies

Replacing items with modern equivalents (e.g., single to double glazing) is still treated as a repair, provided it restores the property to its original condition.

Expenses You Cannot Claim

Certain costs are not deductible, such as:

• Capital improvements (extensions, conversions)
• The full amount of mortgage repayments (only interest is deductible)
• Personal expenses or private telephone calls
• Clothing for business meetings (as these are partly personal)

Mortgage Interest on Additional Borrowing

If you increase your mortgage, interest on the additional loan may be deductible if the funds are wholly and exclusively used for the rental business. Borrowing above the property's original capital value when introduced to your letting business is not tax deductible. For residential lets, interest restrictions introduced in 2017 apply.

MTD For IT

Making Tax Digital for Income Tax (MTD for IT) will impact landlords from April 2026, and many landlords haven't even thought about these deadlines, let alone started preparing.

Landlords will be required to use approved software to keep digital records and submit quarterly updates to HMRC. Failure to meet deadlines accrues points, which in turn add up to fines, similar to the MTD for VAT system.

With Making Tax Digital set to increase reporting requirements and frequency from April 2026, understanding the rules around allowable expenses is more important than ever.

Risks

If landlords incorrectly claim, there can be serious consequences. For example:

• If you categorise capital improvements as repairs, HMRC may disallow the expenses or even penalise you
• If you mistakenly classify repairs as improvements, you could miss out on immediate tax relief
• If you start claiming for expenses you've never claimed before, HMRC may notice and start an inquiry

Summary

In essence, you can claim expenses that are solely for the purpose of renting out your property, provided they are not personal or capital in nature. Keeping accurate digital records, understanding the distinction between capital and revenue costs, and applying the 'wholly and exclusively' rule will help ensure you maximise your deductions while staying compliant with HMRC regulations.

This information is correct as at 4th August 2025 and can be subject to change. For up to date, tailored advice, you should speak to one of our qualified tax professionals who will advise you in a tax-efficient way that suits your personal circumstances.

Author

Melanie O'Connor | ATT | CTA
Director