Allowable expenses for landlords: the full list, and the costs that aren't on it

In England, Wales, Scotland and Northern Ireland, the expense rules for rental income are the same; Scottish rates can change the tax bill, but not what counts as an allowable expense. The practical test is whether the cost is for the property business, revenue rather than capital, and not replaced by a special rule such as mortgage-interest relief.

What expenses can landlords claim against rental income?

Landlords can claim day-to-day rental-business costs against rental income, including letting agent fees, short-lease legal fees, accountancy fees, insurance, repairs, utilities, ground rent, service charges, Council Tax, cleaning, gardening, phone calls, stationery and advertising. HMRC’s public list says: “Allowable expenses are things you need to spend money on in the day-to-day running of the property, like: letting agents' fees, legal fees for lets of a year or less, or for renewing a lease for less than 50 years, accountants' fees, buildings and contents insurance, maintenance and repairs to the property (but not improvements), utility bills, like gas, water and electricity, rent, ground rent, service charges, Council Tax, services you pay for, like cleaning or gardening, other direct costs of letting the property, like phone calls, stationery and advertising.” The cleaner answer is: allowable expenses for rental income are running costs, not purchase costs, improvements or personal spending.

What can't you claim against your rental income?

You cannot claim capital costs, improvements, personal spending, the first-time purchase of domestic items, or any mixed cost except the identifiable rental-business part. The capital rule is blunt: “In calculating the profits of a trade, no deduction is allowed for items of a capital nature.” That is why buying the property, extending it, upgrading it beyond repair, or first furnishing it is not an ordinary rental-income deduction. Replacement of Domestic Items Relief is only for replacements, because HMRC says it allows “a deduction for the replacement (not initial purchase) of certain domestic items.” Mixed costs must be split: “Where an identifiable part of an expense is wholly and exclusively incurred for the purposes of the property business that part can be deducted.” The cost that often feels legitimate but fails is the first-time furnishing of a rental: replacement sofa, yes; first sofa for a newly furnished let, no.

Do mortgage payments and mortgage fees count as allowable expenses?

An individual landlord gets no deduction at all for mortgage interest or arrangement fees against rental income; instead, qualifying finance costs give a 20% cut in the tax bill. The statute says “no deduction is allowed for costs of a dwelling-related loan,” and government guidance summarises the result as: “The tax relief that landlords of residential properties get for finance costs is being restricted to the basic rate of Income Tax.” Mortgage arrangement fees, broker fees and commission follow the same rule because HMRC includes “Any incidental costs incurred in obtaining the loan. This includes items such as fees or commission payments.” Capital repayments are not rental expenses either: they repay the loan used to buy the asset, not the running cost of letting it. Companies are different: gov.uk says, “If you're a company paying Corporation Tax, you can claim interest on property loans as an allowable expense.”

Can you claim for repairs and a new boiler?

You can claim repairs against rental income, and a like-for-like new boiler is normally claimed as a repair rather than through furnishings relief. Gov.uk lists “maintenance and repairs to the property (but not improvements)” as allowable, while HMRC says the cost “normally remains revenue expenditure where any improvement arises only because the customer uses new materials that are broadly equivalent to the old materials.” A boiler matters because it is not a domestic item for Replacement of Domestic Items Relief: HMRC’s excluded fixtures list includes “Any boiler or water-filled radiator installed in a dwelling-house as part of a space or water heating system.” So the test is not whether a boiler is a replacement appliance; it is whether the work restores the heating system or improves the property. Replacing a failed boiler with a modern broadly equivalent boiler is a repair; installing a materially upgraded system is capital improvement.

Is landlord insurance tax deductible?

Landlord insurance is tax deductible where the policy is for the rental business, including buildings, contents and loss-of-rent cover. HMRC’s manual says: “Premiums on insurance policies covering the risks listed below will be allowable if paid for the purposes of the property business.” Gov.uk’s public list also includes “buildings and contents insurance” among allowable expenses. The key condition is business purpose: a policy covering the let property is an expense of the letting business, while a personal insurance cost is not. One broker’s 2026 statistics page gives a useful market benchmark — “The median cost of landlord insurance in the UK in 2026 is £284.75” — but the tax treatment does not depend on the average premium. If the insurance is genuinely for the rental property, claim the premium as an expense; if it compensates you for lost rent, the payout has its own tax treatment.

Can you deduct letting agent and management fees?

You can deduct ongoing letting agent fees and management fees from rental income, but not a capital fee for the first letting under a lease of more than one year. Gov.uk names “letting agents' fees” in its allowable-expenses list, and the same line includes “legal fees for lets of a year or less, or for renewing a lease for less than 50 years, accountants' fees.” HMRC draws the capital line for first long lets: “The expenses incurred in connection with the first letting or subletting of a property for more than one year are capital expenditure and therefore not allowable.” In the market, full management fees commonly run at 8–12% of rent plus VAT; one industry guide states, “Letting agent fees run 8 to 12% of your rent plus VAT.” Abodient records rent due, rent received, arrears and finance figures for a tax return, which matters because agent fees are easiest to claim correctly when the rent and deductions reconcile.

Can you claim legal and solicitors' fees?

You can claim legal and solicitors’ fees only where they are revenue costs of the property business, such as short lettings, renewals under 50 years and some tenant-eviction costs. HMRC states the general rule: “Expenditure on professional fees of a revenue nature is deductible if they are incurred for the purposes of the property business.” It then gives the short-lease boundary: “The expenses incurred in connection with the first letting or subletting of a property for more than one year are capital expenditure and therefore not allowable,” while “The normal legal and professional fees incurred on the renewal of a lease are also allowable if the lease is for less than 50 years.” HMRC also names “the cost of evicting an unsatisfactory tenant in order to relet the property” as deductible. Buying the property, granting a long lease or dealing with capital ownership is different: those legal costs are capital, not rental-income expenses.

Are accountancy fees tax deductible?

Accountancy fees for property accounts and ordinary commercial accountancy work are deductible, but the cost of completing a personal tax return or computing Capital Gains Tax is not. HMRC says, “Fees incurred for preparing accounts for commercial reasons and for many other accountancy services satisfy the 'wholly and exclusively' test.” There is a technical trap here: fees for preparing accounts and agreeing the tax liability are also allowed under practice, not because every part of the personal tax process is automatically deductible; HMRC describes “a longstanding practice of allowing normal recurring legal, accountancy etc expenses incurred in preparing accounts, or agreeing the tax liability.” The exclusion is explicit: “the costs of completion of a tax return or the computation of Capital Gains Tax liability are not allowable in computing trading profits.” So the invoice should be split where possible: property accounts, yes; personal Self Assessment completion, no.

Are ground rent, service charges and maintenance fees tax-deductible?

Ground rent, service charges and common-parts maintenance costs are tax-deductible where they relate to the let property and not to private use. Gov.uk lists “rent, ground rent, service charges” as allowable expenses. HMRC’s more detailed ground-rent rule says “the proportion of the rent they pay which relates to the let part may be allowed as an expense of the property business,” which is why apportionment matters if the landlord also occupies part of the building. For common parts, HMRC says “the landlord can deduct expenditure on the upkeep of the common parts from their property business profits.” In practice, that covers the ordinary service-charge and maintenance-fee costs a leaseholder-landlord pays to keep a block running: cleaning, lighting, repairs, gardening and management of shared areas. Do not re-label a capital contribution as a repair simply because it appears on a service-charge statement.

Are bank charges on your rental account deductible?

Ordinary bank charges on a rental-business account are deductible if they are incurred wholly and exclusively for the property business, but interest-like charges and loan-arrangement charges follow the finance-cost restriction for individual landlords. HMRC’s general rule says “expenses cannot be deducted unless they are incurred wholly and exclusively for business purposes.” That covers normal account fees, transaction charges and service charges on an account used for the letting business. The line changes where the charge is economically part of borrowing: the legislation includes “incidental costs of obtaining finance by means of the loan,” and HMRC describes “the effect of limiting relief for relevant interest and finance costs to the basic rate of relief.” So a monthly rental-account fee is an ordinary expense; a mortgage arrangement fee, loan fee or interest charge is not fully deducted by an individual residential landlord and instead feeds into the 20% finance-cost reducer.

Can you claim travel to and from your rental property?

You can claim travel to and from a rental property only where the journey is exclusively for the rental business, and unincorporated landlords can use 55p per mile for the first 10,000 business miles in 2026/27. HMRC’s travel rule says “the cost of travelling from home to the let property and back will only be allowable if the purpose in making the journey is exclusively a business one.” That means a trip to inspect damage, meet a contractor or do a check-out can qualify, but a mixed trip with a private purpose must be restricted or disallowed. The 2026/27 mileage figure is important because older pages still quote 45p; HMRC PIM2220 now states: “Cars and goods vehicles first 10,000 miles 55p.” HMRC also confirms the method: “From 2017/18 unincorporated landlords can choose to use a fixed rate mileage deduction rather than deducting actual running costs and claiming capital allowances.”

How much can you claim for using a room at home as an office?

There is no flat-rate working-from-home allowance for landlords: HMRC’s fixed-rate provisions reach vehicle mileage but not use of home, so you apportion the actual fixed costs of the room. HMRC’s property manual says that where a landlord genuinely runs the business from home, “a proportion of all fixed expenses referable to that room may be deducted.” The common self-employed flat-rate use-of-home figure is not extended to property businesses in the same way: HMRC’s list of property-business fixed-rate provisions includes “Section 94D to 94G: Expenditure on vehicles,” and not the use-of-home flat rate. In practice, the defensible calculation is a reasonable apportionment of actual home costs by room, use and time, not a standard HMRC landlord allowance. If a room is partly private, claim only the business proportion; if it is not genuinely used for the property business, claim nothing.

How much of your phone bill can you claim?

You can claim only the business-related calls and rental-business phone costs, not a flat percentage of your whole personal phone bill. HMRC’s public guidance is specific: “private telephone calls — you can only claim for the cost of calls relating to your property rental business.” That means calls to tenants, contractors, letting agents, insurers, accountants and freeholders can be allowable, but family calls, personal data use and ordinary private line rental are not rental expenses. If the same phone is used personally and for lettings, keep an itemised bill or a reasonable call log and claim the identifiable property-business element. A separate rental-business phone or SIM makes the evidence cleaner, but the tax rule is still the same: the cost must be incurred wholly and exclusively for the letting business, or split so only the identifiable business part is deducted.

Can you claim expenses while the property is empty?

You can claim revenue expenses while a rental property is empty if the property business has not ceased, such as during a genuine void while you are trying to re-let or while repairs are being carried out. HMRC says: “If there is evidence that the customer has been trying unsuccessfully to get tenants during a period with no letting, you can normally accept that the property business has not ceased.” It gives the same treatment for works: “You may also accept that the business has not ceased in cases where the property is temporarily unavailable while work on repairs or alterations are carried out.” The boundary is a change of use. HMRC says: “You should normally treat the business as ceasing if, after letting stops, the property is put to some other use, for example the landlord lives in it himself.” Void-period costs are therefore claimable only while the letting business continues.

Do you pay tax on a landlord insurance payout?

You pay tax on a landlord insurance payout if it replaces taxable rental income, but a repairs payout instead reduces the repair expense you can claim. HMRC states the direct rental-income rule: “Insurance receipts in respect of loss of rents are taxable as income.” For repairs, gov.uk says: “If you have an insurance policy that covers the cost of some repairs to your property, you can only claim the additional expenses that you incurred for repairs which the insurance pay-out did not cover.” Capital insurance money after fire or flood has a different capital-gains framework: the statute protects a restoration case where “the capital sum is wholly applied in restoring the asset.” The practical split is simple: loss-of-rent payout, taxable income; repair reimbursement, claim only the uninsured shortfall; capital compensation not fully spent restoring the property may need capital-gains treatment.

What can you claim without receipts?

You can claim the £1,000 property allowance without receipts for actual expenses, and you can use fixed-rate mileage with a mileage log, but ordinary expenses still need records in case HMRC checks. Gov.uk says: “You can claim the property allowance and get up to £1,000 a year tax-free property income.” It is not an extra deduction on top of real costs: “You cannot deduct any other expenses or allowances if you claim the allowances.” For vehicle costs, HMRC says “From 2017/18 unincorporated landlords can choose to use a fixed rate mileage deduction rather than deducting actual running costs and claiming capital allowances,” so fuel receipts are not needed for the mileage method, but journey records are. For everything else, you do not submit receipts with the return, but HMRC says: “You'll need your records to fill in your tax return correctly. If HMRC checks your tax return, they may ask for the documents.”

Is there a landlord allowance you can claim instead of expenses?

Yes: individual landlords can claim the £1,000 property allowance instead of deducting actual expenses, but they cannot use it as well as expenses or the residential mortgage-interest tax reducer. Gov.uk defines it as: “The property allowance is a tax exemption of up to £1,000 a year for individuals with income from land or property.” The swap is explicit: “You cannot deduct any other expenses or allowances if you claim the allowances.” The finance-cost restriction is also explicit: “You cannot use the property allowance if you claim the tax reducer for finance costs such as mortgage interest for a residential property.” The allowance is therefore useful mainly where gross property income is small or real expenses are below £1,000. For most mortgaged buy-to-let landlords, actual expenses plus the finance-cost reducer will often matter more than the allowance, but the calculation decides.

What can you claim if you own the property through a limited company?

A limited company can claim normal company rental-business expenses, including mortgage interest, and then pays Corporation Tax on profit rather than Income Tax on individual property income. The mortgage-interest distinction is the big one: HMRC says “Companies carrying on property business are not affected,” and gov.uk says, “If you're a company paying Corporation Tax, you can claim interest on property loans as an allowable expense. You cannot do this if you're an individual landlord who pays Income Tax.” Corporation Tax rates then apply: gov.uk says, “If your company made a profit of £50,000 or less, you'll pay the 'small profits rate', which is 19%.” Incorporation has become a major market choice, not a niche workaround: trade press reporting Hamptons’ analysis of Companies House data projected “around 67,000 new companies being set up by the end of 2025.” The tax treatment improves interest deductibility, but company ownership brings separate administration, extraction and sale-tax consequences.

Where do expenses go on your tax return?

Individual landlords put property income and expenses on the SA105 UK property pages, with ordinary expenses in the itemised property-expense boxes, the property allowance in its own box, and residential finance costs in a separate finance-cost box. The SA105 form shows ordinary expense categories starting with “24 Rent, rates, insurance and ground rents,” while the flat allowance is separately labelled “20.1 Property income allowance.” Residential mortgage interest is not entered with ordinary expenses because it is not deducted from rental profit for individual landlords; the form instead has “44 Residential property finance costs.” That layout reflects the tax rules: ordinary allowable expenses reduce rental profit, the £1,000 property allowance replaces expenses, and residential finance costs feed the 20% tax reducer. “Other allowable property expenses” is for genuine revenue costs that do not fit a named box, not for capital spending, improvements or private costs.

Last reviewed August 2026.

Sources

• “Gov.uk, Renting out your property: paying tax, — "Allowable expenses are things you need to spend money on in the day-to-day running of the property, like: letting agents' fees, legal fees for lets of a year or less, or for renewing a lease for less than 50 years, accountants' fees, buildings and contents insurance, maintenance and repairs to the property (but not improvements), utility bills, like gas, water and electricity, rent, ground rent, service charges, Council Tax, services you pay for, like cleaning or gardening, other direct costs of letting the property, like phone calls, stationery and advertising.” Source
• “HMRC Property Income Manual PIM3210, — "Broadly, it allows a deduction for the replacement (not initial purchase) of certain domestic items.” Source
• “ITTOIA 2005 s.34, — "In calculating the profits of a trade, no deduction is allowed for—(a)expenses not incurred wholly and exclusively for the purposes of the trade, or (b)losses not connected with or arising out of the trade.” Source
• “HMRC Property Income Manual PIM2010, — "Where an identifiable part of an expense is wholly and exclusively incurred for the purposes of the property business that part can be deducted.” Source
• “ITTOIA 2005 s.33, — "In calculating the profits of a trade, no deduction is allowed for items of a capital nature.” Source
• “ITTOIA 2005 s.272A, — "no deduction is allowed for costs of a dwelling-related loan” Source
• “Gov.uk guidance on finance-cost restriction, — "The tax relief that landlords of residential properties get for finance costs is being restricted to the basic rate of Income Tax.” Source
• “HMRC Property Income Manual PIM2054, — "Any incidental costs incurred in obtaining the loan. This includes items such as fees or commission payments” Source
• “HMRC Property Income Manual PIM2030, — "the cost normally remains revenue expenditure where any improvement arises only because the customer uses new materials that are broadly equivalent to the old materials” Source
• “HMRC Property Income Manual PIM3210, — "Any boiler or water-filled radiator installed in a dwelling-house as part of a space or water heating system” Source
• “HMRC Property Income Manual PIM2110, — "Premiums on insurance policies covering the risks listed below will be allowable if paid for the purposes of the property business” Source
• “HMRC Property Income Manual PIM2110, — "Insurance receipts in respect of loss of rents are taxable as income.” Source
• “Alan Boswell landlord insurance statistics, — "The median cost of landlord insurance in the UK in 2026 is £284.75.” Source
• “HMRC Property Income Manual PIM2120, — "The expenses incurred in connection with the first letting or subletting of a property for more than one year are capital expenditure and therefore not allowable” Source
• “Landlord Resource, Letting agent fees, — "Letting agent fees run 8 to 12% of your rent plus VAT.” Source
• “HMRC Property Income Manual PIM2120, — "Expenditure on professional fees of a revenue nature is deductible if they are incurred for the purposes of the property business.” Source
• “HMRC Property Income Manual PIM2120, — "The normal legal and professional fees incurred on the renewal of a lease are also allowable if the lease is for less than 50 years.” Source
• “HMRC Property Income Manual PIM2120, — "the cost of evicting an unsatisfactory tenant in order to relet the property” Source
• “HMRC Business Income Manual BIM46450, — "a longstanding practice of allowing normal recurring legal, accountancy etc expenses incurred in preparing accounts, or agreeing the tax liability.” Source
• “HMRC Business Income Manual BIM46450, — "Fees incurred for preparing accounts for commercial reasons and for many other accountancy services satisfy the 'wholly and exclusively' test.” Source
• “HMRC Business Income Manual BIM46450, — "the costs of completion of a tax return or the computation of Capital Gains Tax liability are not allowable in computing trading profits.” Source
• “HMRC Property Income Manual PIM2205, — "the proportion of the rent they pay which relates to the let part may be allowed as an expense of the property business” Source
• “HMRC Property Income Manual PIM2078, — "the landlord can deduct expenditure on the upkeep of the common parts from their property business profits.” Source
• “ITTOIA 2005 s.272B, — "incidental costs of obtaining finance by means of the loan” Source
• “HMRC Property Income Manual PIM2220, — "the cost of travelling from home to the let property and back will only be allowable if the purpose in making the journey is exclusively a business one” Source
• “HMRC Property Income Manual PIM2220, — "Cars and goods vehicles first 10,000 miles 55p” Source
• “HMRC Property Income Manual PIM2220, — "From 2017/18 unincorporated landlords can choose to use a fixed rate mileage deduction rather than deducting actual running costs and claiming capital allowances” Source
• “HMRC Property Income Manual PIM2100, — "a proportion of all fixed expenses referable to that room may be deducted” Source
• “HMRC Property Income Manual PIM1104, — "Section 94D to 94G: Expenditure on vehicles” Source
• “Gov.uk, Income Tax when you rent out a property, — "private telephone calls — you can only claim for the cost of calls relating to your property rental business” Source
• “HMRC Property Income Manual PIM2510, — "If there is evidence that the customer has been trying unsuccessfully to get tenants during a period with no letting, you can normally accept that the property business has not ceased.” Source
• “HMRC Property Income Manual PIM2510, — "You may also accept that the business has not ceased in cases where the property is temporarily unavailable while work on repairs or alterations are carried out.” Source
• “HMRC Property Income Manual PIM2510, — "You should normally treat the business as ceasing if, after letting stops, the property is put to some other use, for example the landlord lives in it himself.” Source
• “Gov.uk, Income Tax when you rent out a property, — "If you have an insurance policy that covers the cost of some repairs to your property, you can only claim the additional expenses that you incurred for repairs which the insurance pay-out did not cover.” Source
• “TCGA 1992 s.23, — "the capital sum is wholly applied in restoring the asset” Source
• “Gov.uk, Keeping tax records, — "You'll need your records to fill in your tax return correctly. If HMRC checks your tax return, they may ask for the documents.” Source
• “Gov.uk, Tax-free allowances on property and trading income, — "The property allowance is a tax exemption of up to £1,000 a year for individuals with income from land or property.” Source
• “Gov.uk, Tax-free allowances on property and trading income, — "You cannot deduct any other expenses or allowances if you claim the allowances.” Source
• “Gov.uk, Tax-free allowances on property and trading income, — "You cannot use the property allowance if you claim the tax reducer for finance costs such as mortgage interest for a residential property.” Source
• “Gov.uk, Corporation Tax rates, — "If your company made a profit of £50,000 or less, you'll pay the 'small profits rate', which is 19%.” Source
• “Property Industry Eye reporting Hamptons research, — "around 67,000 new companies being set up by the end of 2025” Source
• “HMRC SA105 UK property pages 2025-26, — "24 Rent, rates, insurance and ground rents” Source
• “HMRC SA105 UK property pages 2025-26, — "20.1 Property income allowance” Source
• “HMRC SA105 UK property pages 2025-26, — "44 Residential property finance costs” Source