Allowable Expenses for Landlords: Complete HMRC List 2026

HMRC taxes rental profit, not rental income. Profit is what remains after you deduct your allowable expenses. Every legitimate expense you claim cuts your tax bill directly — a £1,000 expense saves a basic-rate taxpayer £200 and a higher-rate taxpayer £400.

Most landlords under-claim. They miss travel costs, home office deductions, or replacement furniture relief. This guide covers every category HMRC permits, the legal test you must meet, and what never qualifies.

The Legal Test: “Wholly and Exclusively”

Section 34 of the Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005) sets the threshold for deductibility: an expense must be incurred wholly and exclusively for the purposes of the property rental business.

In practice this means:

• Purpose must be business: Personal benefit disqualifies the whole deduction unless the business and personal elements can be separately identified
• Dual-purpose expenses: If an item is used partly for the rental business and partly personally, claim only the business proportion — but only where the split is identifiable and defensible
• Incidental benefit is fine: If the primary purpose is business and personal benefit is incidental, the expense qualifies in full

Keep this test in mind for every expense you claim. It is the first question HMRC asks when they open a landlord enquiry.

Finance Costs and Mortgage Interest

Individual landlords no longer deduct mortgage interest from rental income before calculating tax. Since Section 24 of the Finance Act 2015 was fully phased in from April 2020, you receive a 20% tax credit on your residential finance costs instead.

Finance costs that qualify for the tax credit:

• Interest on buy-to-let mortgages (not the capital repayment element)
• Interest on loans taken to fund repairs, furnishings, or property improvements
• Mortgage arrangement and broker fees (amortised over the loan term)
• Early repayment charges when you remortgage
• Overdraft interest on a dedicated rental bank account

Finance costs that do not qualify:

• Capital repayments on any mortgage
• Interest on loans drawn for personal use (even if secured against the rental property)
• Mortgage protection life insurance premiums

The Section 24 restriction hits higher-rate and additional-rate taxpayers hardest. A landlord paying 40% tax on a £8,000 annual mortgage interest bill saves £1,600 in basic-rate credits but loses the additional 20% relief — an extra £1,600 per year compared to the pre-2020 rules. Our landlord tax deductions guide has the full worked example and the limited company comparison.

Repairs and Maintenance

One of the largest deduction categories and the most frequently challenged by HMRC. The test is always: repair or improvement?

Expenditure	Classification	Reason
Fixing a burst pipe	Revenue (deductible)	Restores to existing condition
Replacing a broken boiler with equivalent model	Revenue	Like-for-like replacement
Repainting throughout between tenancies	Revenue	Maintenance
Replacing single-glazed windows with equivalent	Revenue	Like-for-like
Installing double glazing for the first time	Capital	Improvement
Loft conversion to add a bedroom	Capital	Adds new space
Upgrading basic kitchen to high-spec	Capital (partly)	Material improvement
Damp proofing	Revenue	Repair to existing structure
Garden maintenance (ongoing)	Revenue	Upkeep
Initial landscaping	Capital	Creates something new

The modern equivalent principle: If the original material is genuinely no longer available, HMRC accepts the cost of the modern equivalent as a repair. Lead pipes replaced with copper? Repair. Single-glazed glass unavailable in that size, and you must use double? HMRC may accept it as a repair — document your reasoning.

Insurance Premiums

All insurance premiums directly related to the rental property qualify in full.

Deductible:

• Landlord buildings insurance
• Landlord contents insurance (for furnished lets)
• Public liability insurance
• Rent guarantee insurance
• Legal expenses insurance for property matters
• Emergency home cover and boiler protection plans

Not deductible:

• Your personal life insurance or mortgage protection policy
• Buildings insurance on your own home
• Combined personal/property policies where the split cannot be identified

Professional and Legal Fees

Professional fees qualify when they relate to running the rental business rather than acquiring or disposing of assets.

Deductible:

• Accountant’s fees for your property tax return
• Tax advice on rental income
• Solicitor’s fees for lease renewals (not new leases)
• Solicitor’s fees for eviction proceedings
• Debt collection costs for rent arrears
• NRLA, UKLA, or similar landlord association memberships
• Valuation fees required for tax purposes

Not deductible:

• Solicitor’s fees for buying or selling a property — these are capital costs that add to your CGT base cost
• Costs of creating a new tenancy agreement for the first time (capital)
• Planning permission fees for improvements

Letting Agent and Management Fees

If you use a letting agent, their fees are fully deductible:

• Full management fees (typically 8–15% of monthly rent)
• Tenant-finding and referencing fees
• Inventory, check-in, and check-out charges
• Tenancy renewal fees
• Maintenance coordination fees

Self-manage your property and you eliminate this expense entirely — while also keeping a far greater share of the tax saving. Our self-managing landlord guide covers every task agents perform, including tenant finding, referencing, and legal compliance.

Travel and Motor Expenses

Deductible:

• Mileage at 45p per mile for the first 10,000 miles, 25p per mile thereafter (HMRC approved mileage rates 2026/27)
• Public transport fares for property visits
• Parking costs when attending the property
• Mileage to your accountant or solicitor for property matters
• Reasonable overnight accommodation if the property requires a stay

Not deductible:

• Travel for viewing potential investment properties before you own them (pre-trading)
• Commuting costs if property management is your main occupation and the property is your regular workplace

Record-keeping is essential: Maintain a mileage log with date, destination, purpose, and miles driven. HMRC routinely disallows travel claims made without contemporaneous records — a rough estimate made at filing time is not sufficient.

Advertising and Tenant Finding

Deductible:

• Listing fees on OpenRent, Rightmove, Zoopla, or SpareRoom
• Photography and floor plan production
• Tenant referencing and credit check fees
• Energy Performance Certificate costs for a new let (or renewal every 10 years)
• Gas safety certificate costs before the first tenancy

Council Tax and Utility Bills

These are deductible only when you are the party legally liable to pay them:

Deductible:

• Council tax during void periods between tenancies
• Council tax in inclusive-rent arrangements (common in HMOs)
• Gas, electricity, and water during void periods
• Utility bills in HMOs where you pay them as landlord

Not deductible:

• Council tax and utilities where the tenant is contractually responsible — these are the tenant’s costs, not yours

Ground Rent and Service Charges

On leasehold properties, these ongoing charges are allowable:

• Ground rent
• Service charges covering routine maintenance, cleaning, and communal areas
• Buildings insurance paid through the service charge

Service charges sometimes include a sinking fund element for major capital works. In practice, HMRC treats the full service charge as revenue unless a large capital works element is explicitly identified and ring-fenced in the service charge accounts.

Home Office and Administration

Home office:

• £6 per week flat rate (£312 per year) — no records required, available to all landlords who manage from home
• Alternatively, a proportionate share of actual home costs (heating, electricity, broadband, mortgage interest) based on the room and hours used for property management

Administration costs:

• Mobile phone — business proportion only
• Broadband — business proportion if used for property management
• Accounting software and property management app subscriptions
• Stationery and postage
• Bank charges on a dedicated rental account
• Camera and laptop — business proportion

For mixed personal/business items, calculate the percentage of business use and claim that fraction. A laptop used 70% for property management: claim 70% of the annual depreciation or actual cost.

Replacement of Domestic Items Relief

The old 10% wear and tear allowance was abolished in April 2016. Replacement Domestic Items Relief (s.311A ITTOIA 2005) took its place. You claim the actual cost of replacing qualifying items in furnished or part-furnished residential properties.

Deductible replacements:

• White goods: washing machines, dishwashers, fridges, freezers
• Soft furnishings: sofas, beds, mattresses, curtains, blinds
• Carpets and floor coverings (like-for-like only)
• Crockery, cutlery, and kitchenware
• Televisions and small kitchen appliances
• Disposal costs for removed items (skip hire, tip fees)

Two rules that catch landlords out:

1. Replacements only — furnishing a property for the first time is capital expenditure, not deductible here
2. Like-for-like cap — if you replace a basic appliance with a premium model, claim only the cost of an equivalent basic replacement; the uplift element is capital expenditure

Pre-Letting Expenses

Expenses incurred before your first tenant moves in can be deductible, provided:

• The property was already in a lettable condition (it didn’t need major structural work)
• The expense would have been allowable as a revenue expense during the letting
• The expense was incurred within a reasonable period before letting began

Deductible pre-letting costs:

• Gas safety certificate and EPC obtained before first let
• Advertising for tenants
• Solicitor’s fees for the tenancy agreement
• Repairs and redecoration to bring the property to a lettable standard (see the repair vs improvement distinction above)

Not deductible:

• The purchase price, stamp duty, and conveyancing costs (capital)
• Major renovation work required to make a derelict property habitable (capital)

Expenses HMRC Never Allows

These are categorically disallowed regardless of how they’re presented:

• Capital repayments on any loan or mortgage
• The original purchase price, stamp duty, and purchase costs (they go into your CGT base cost)
• Improvements and extensions (capital — also go into CGT base cost)
• Fines and penalties, including HMRC late-filing penalties
• Personal expenses with no rental business connection
• Losses on the sale of the property (covered separately by Capital Gains Tax)

The £1,000 Property Income Allowance: Claim or Itemise?

Every landlord has a £1,000 property income allowance (Finance Act 2016, s.17). If your gross rental income is at or below £1,000, your income is exempt from tax and no return is needed for property income. If your income exceeds £1,000, you choose one of two methods:

Method	When to use	How it works
Property income allowance	Expenses under £1,000	Deduct £1,000 flat — no receipts needed for this deduction
Itemise actual expenses	Expenses over £1,000	Deduct every qualifying expense individually

You cannot combine both methods. Choose whichever produces the lower tax bill.

Record-Keeping: What HMRC Requires

Records must be kept for at least five years after the 31 January filing deadline for the relevant tax year. Records for 2025/26 must be kept until 31 January 2032.

Minimum records to keep:

• Bank statements for all rental accounts
• Receipts and invoices for every expense claimed
• Annual mortgage interest statements
• Insurance policy documents and payment evidence
• Tenancy agreements for all tenancies
• Mileage log (date, destination, purpose, miles)
• Records of all rent received

From April 2026, landlords with gross income over £50,000 must maintain digital records and submit quarterly updates to HMRC under Making Tax Digital. The April 2027 threshold drops to £30,000. Start using compatible software now.

Reporting Expenses on Your SA105

All allowable expenses go on the SA105 UK Property supplementary page, attached to your SA100 Self Assessment return. The relevant boxes:

• Box 20: Insurance premiums
• Box 21: Professional and legal fees
• Box 22: Ground rents, council tax, and rates
• Box 23: Travel and all other allowable expenses
• Box 24: Maintenance, repairs, and services
• Box 26: Residential finance costs (Section 24 — entered here, converted to a tax credit by HMRC)

Our SA105 box-by-box guide covers every section with examples, the seven mistakes that trigger HMRC enquiries, and how to handle losses carried forward.

If you’re considering moving your rental properties into a limited company to escape Section 24, read our buy-to-let limited company guide first — the Stamp Duty and Capital Gains Tax costs of incorporation often outweigh the tax saving for smaller portfolios.

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This guide covers allowable expenses for the 2026/27 tax year (6 April 2026 – 5 April 2027). Tax rules change annually — always verify current rates and thresholds at gov.uk or with a qualified accountant before filing your return.