Allowable Expenses for Landlords 2026/27: The Complete List
Last updated 19 June 2026 · 9 min read · By the LandlordTaxAi Editorial Team
The short answer
Landlords can deduct any cost that is wholly and exclusively for renting out a property — repairs and maintenance, letting and management fees, insurance, accountant fees, service charges, advertising, and the cost of replacing furnishings. You cannot deduct capital improvements (these reduce Capital Gains Tax instead) and you can no longer deduct mortgage interest as an expense — it is now a separate 20% credit under Section 24. Below is the full list, plus the repairs-versus-improvements rule that trips up most landlords.
The golden rule: “wholly and exclusively”
HMRC only allows a deduction where the cost is incurred wholly and exclusively for the purposes of your property rental business. If something has a private element — your own car, your home phone, a trip that doubles as a holiday — you can usually only claim the business proportion, and you need to be able to justify how you split it. Everything in the list below assumes the cost passes this test.
The full list of allowable landlord expenses
| Expense | What it covers |
|---|---|
| Repairs & maintenance | Repainting, fixing the boiler, replacing broken tiles, damp treatment, servicing — anything that restores the property to its original condition. |
| Letting & management fees | Agent commission, tenant-find fees, inventory and check-in/check-out costs, ongoing management charges. |
| Insurance | Buildings, contents, landlord liability, and rent guarantee or legal-cover policies. |
| Professional fees | Accountant fees, tax software subscriptions, and certain legal fees for short leases or renewals. |
| Ground rent & service charges | Leasehold ground rent, service and maintenance charges you pay to a freeholder or management company. |
| Utilities & council tax | Gas, electricity, water and council tax — but only where you pay them rather than the tenant (common in HMOs or void periods). |
| Advertising | Costs of advertising the property to find new tenants. |
| Direct running costs | Phone calls, stationery, and travel to and from the property for letting purposes (business mileage only). |
| Replacement of domestic items | Replacing free-standing furniture, white goods, carpets, curtains and kitchenware in a let property (see below). |
When you complete your figures, these map onto the boxes on the SA105 property pages — rents and rates, repairs, finance costs, legal and professional, and other expenses.
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Start your free trialRepairs vs improvements — the costly distinction
This is the single biggest area landlords get wrong. A repair puts something back to how it was and is deducted in the year you pay it. An improvement makes the property better or bigger and is a capital cost — not allowable against rental income, but it does reduce your gain when you eventually sell.
| Repair (deduct now) | Improvement (capital) |
|---|---|
| Replacing a broken boiler with a similar one | Adding central heating where there was none |
| Repainting and redecorating | Building an extension or loft conversion |
| Replacing single glazing with standard double glazing | Fitting a brand-new, higher-spec kitchen layout |
| Fixing the roof after a storm | Converting a house into separate flats |
A helpful test: are you restoring, or upgrading? Replacing like-for-like with the nearest modern equivalent is normally a repair, even if the new part is technically better, because materials have simply moved on. A genuine step-change in quality, size or function is capital.
Replacement of domestic items relief
The old “wear and tear” allowance was abolished in 2016. In its place, you can claim the cost of replacing domestic items in a let property — free-standing furniture, fridges, washing machines, carpets, curtains, crockery and the like. Three rules apply:
- It must be a replacement, not the first time you provide the item — the initial purchase is not deductible.
- You can only claim the cost of a like-for-like replacement. If you upgrade, you claim only what an equivalent basic replacement would have cost.
- Deduct any amount you receive for selling the old item.
The £1,000 property income allowance
If your gross rental income for the year is £1,000 or less, it is covered by the property allowance and you usually do not need to declare it. If you earn more, you can choose to deduct a flat £1,000 from your income instead of your actual expenses — useful only if your real costs are tiny. You cannot claim both the £1,000 allowance and your expenses, and you cannot use it against income from your own company or employer. For most landlords with a mortgage, agent and insurance, claiming actual expenses wins easily.
If you take in a lodger in your own home, look at the separate Rent a Room scheme (£7,500 tax-free) instead — it is far more generous.
What you cannot claim
- Mortgage interest as an expense — given as a 20% tax credit instead under Section 24.
- Capital improvements — set these against Capital Gains Tax on sale, not income.
- Your own time or labour — only paid-for work.
- The cost of buying or selling the property (legal fees, SDLT, agent sale fees) — these are capital.
- Initial repairs to bring a newly bought run-down property up to a lettable standard.
Frequently asked questions
What expenses can landlords claim against rental income?
You can deduct costs that are wholly and exclusively for renting out the property: general repairs and maintenance, letting agent and management fees, accountant fees, landlord insurance, ground rent and service charges, utility bills and council tax you pay (not the tenant), advertising for new tenants, and the cost of replacing furnishings under replacement of domestic items relief. You cannot deduct mortgage interest as an expense any more — since 2020/21 it is given as a separate 20% tax credit under Section 24.
What is the difference between a repair and an improvement?
A repair restores the property to its original condition and is deducted against your rental income in the year you pay it — for example, fixing a boiler, repainting, or replacing broken roof tiles. An improvement makes the property better than it was, such as building an extension or upgrading to a higher standard than the original. Improvements are capital costs: they are not allowable against rental income, but you can set them against any Capital Gains Tax when you sell. Replacing something with a modern equivalent (single-glazed windows with standard double glazing) usually still counts as a repair.
Can I claim the £1,000 property allowance instead of expenses?
Yes. The property income allowance lets you deduct a flat £1,000 from your gross rental income instead of claiming your actual expenses. If your rental income is £1,000 or less, it is fully covered and you usually do not need to report it at all. If your income is higher, you choose whichever is bigger — the £1,000 allowance or your real expenses — but you cannot claim both. The flat allowance only makes sense for landlords with very low running costs.
Is mortgage interest an allowable expense for landlords?
No, not as a deduction. Since the 2020/21 tax year, individual landlords cannot deduct mortgage interest from rental profit. Instead you receive a basic-rate (20%) tax credit on the interest under the Section 24 rules. This is why higher-rate landlords pay more tax than they used to on the same property. Limited companies are different — they still deduct interest in full.
Can I claim expenses before the property is let?
Pre-letting running costs incurred wholly for the rental business in the seven years before it starts can often be claimed once letting begins, as long as they would have been allowable during letting. However, the cost of getting a newly bought property up to a lettable standard — fixing problems that existed when you bought it — is treated as capital, not a deductible repair. Keep clear records and dates so the two are not confused.
Do I need receipts for landlord expenses under MTD?
Yes. Under Making Tax Digital for Income Tax you must keep digital records of your income and expenses, and you should retain the underlying receipts and invoices to back up every claim. HMRC can ask you to evidence any deduction. Good software that captures and categorises each cost as you go makes the quarterly updates and the year-end declaration far easier.
LandlordTaxAi Editorial Team
The LandlordTaxAi editorial team writes about UK landlord tax, HMRC compliance, and Making Tax Digital. Our content is reviewed against current HMRC guidance and updated when the rules change. Operated by LandlordTaxAi, United Kingdom. Follow us on LinkedIn.
Last reviewed: 19 June 2026 · Based on HMRC guidance for the 2026/27 tax year. This article is informational only and does not constitute tax advice. Consult a qualified accountant for advice on your specific circumstances.