Every pound of allowable expense you claim reduces your rental profit — and for a higher-rate taxpayer, that’s 40p off your tax bill. Yet many landlords miss legitimate costs, while others claim things HMRC will reject. The test is simple to state: a cost is allowable if it’s incurred wholly and exclusively for your letting business, and it’s revenue rather than capital.
This guide lists what you can claim, what you can’t, and the special rule for mortgage interest that catches out so many landlords.
Expenses you can claim
Running and management costs
- Letting agent fees, including tenant-finding and management fees
- Accountancy fees for preparing your rental figures
- Legal fees for lets of a year or less, or for renewing a lease of under 50 years
- Landlord insurance, buildings insurance and rent guarantee cover
- Ground rent and service charges on leasehold flats
- Advertising for tenants
- Credit checks and referencing
- Phone calls, stationery and software used for the letting business
Property costs
- Repairs and maintenance — fixing a boiler, repainting, replacing broken tiles
- Gas safety certificates, EICRs and EPCs
- Cleaning and gardening between or during tenancies
- Council tax, utilities and TV licence — but only if you pay them, not the tenant
- Replacing furniture and appliances on a like-for-like basis (replacement of domestic items relief)
Travel
You can claim travel to your properties for inspections, repairs or meeting tenants. If you use your car, the simplest method is the approved mileage rate, which rose to 55p a mile for the first 10,000 business miles from April 2026. Travel that’s partly personal — combining a property visit with a holiday — isn’t fully allowable.
Mortgage interest: the special rule
If you own residential property personally, mortgage interest is not an allowable expense. Instead, you get a tax credit worth 20% of your finance costs (the Section 24 rule). Enter interest and other finance costs — such as mortgage arrangement fees — in the separate finance costs box on your return, not in expenses.
Only interest counts. Capital repayments on a mortgage are never deductible, whichever way you hold the property.
Expenses you can’t claim
- The purchase price and buying costs such as stamp duty and conveyancing — these reduce your Capital Gains Tax when you sell instead
- Improvements — extensions, loft conversions, upgrading a basic kitchen to a luxury one
- Initial furnishing of a property for the first time
- Your own time — you can’t pay yourself for managing your own lets
- Personal costs — for example, the part of a phone bill that’s personal
- Costs for periods you live in the property
The repairs vs improvements line is the one HMRC checks most. As a guide, a repair restores something to its previous condition, using modern equivalent materials where needed. An improvement makes the property better than it was.
Expenses before your first tenant moves in
Costs you incur before the letting starts can be claimed if they would have been allowable once you started letting, and were incurred within 7 years. Repairs to make a newly bought, run-down property fit to let are often treated as capital, though, so take advice.
Records to keep
Keep invoices, receipts and bank statements for each expense for at least 5 years after the 31 January filing deadline. If you’re in Making Tax Digital for Income Tax, you must also record each expense digitally.
Don’t leave money on the table
SmartFiling’s ICAEW chartered accountants review every cost so you claim everything you’re entitled to, and nothing that won’t stand up. See our Landlord Accountant service or get a free quote.
Frequently asked questions
Can I claim for a new boiler?
Usually yes, if it replaces an old one with a similar modern equivalent. A brand-new system where none existed is an improvement.
Can I claim expenses if the property was empty?
Yes, if it was available to let and you were actively looking for tenants.
Can I claim the cost of a property management course?
Training that updates existing knowledge is usually allowable. A course to gain new skills before you start is usually not.
