Is Landlord Insurance Tax Deductible? What You Can Claim (2026/27)
Last updated 24 June 2026 · 7 min read · By the LandlordTaxAi Editorial Team
The short answer
Yes — landlord insurance is tax deductible. Premiums for buildings, contents, landlord liability, rent guarantee and legal-expenses cover are allowable revenue expenses, because they’re incurred wholly and exclusively for your rental business. The one catch: if insurance pays out for a repair, you can only claim the repair costs it didn’t cover.
Insurance is one of the few costs every landlord carries, and it’s fully deductible — yet many landlords either forget to claim it or get confused when a claim pays out. This guide sets out which policies qualify, how to handle pay-outs, and how to record premiums for Making Tax Digital.
For the wider picture of deductible costs, see allowable expenses for landlords.
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Rental Profit Calculator (with Insurance)
Add your insurance premiums and other costs to see your taxable rental profit for 2026/27.
Result
- Taxable profit (rent − expenses)
- £11,200
- Income Tax at 20%
- £2,240
- Less mortgage interest credit (20%)
- − £1,000
- Tax due on this property
- £1,240
- Income after tax
- £9,960
Insurance premiums are allowable. Net insurance pay-outs against repairs. Estimate only.
Which insurance policies you can deduct
Any insurance taken out for the purposes of the letting is an allowable expense. That covers the policies landlords typically hold:
- Buildings insurance on the rental property
- Contents insurance for items you provide (furnished lets)
- Landlord liability / property owners’ liability cover
- Rent guarantee and tenant-default insurance
- Legal expenses cover for tenancy disputes and evictions
Ordinary home insurance on your own residence isn’t deductible — only insurance connected to the property you let. If you let part of your own home, apportion fairly.
The insurance pay-out rule
This is where landlords trip up. If you claim on your insurance and the insurer pays for a repair, you can’t also deduct the full repair cost — that would be double relief.
Instead, you only deduct the part of the repair the insurance didn’t cover (such as the excess or any shortfall). And if the pay-out exceeds the repair cost, the surplus may itself be taxable income of the rental business.
| Situation | What you can claim |
|---|---|
| Repair fully covered by insurer | Nothing extra — the insurer paid |
| Repair partly covered (e.g. excess) | The shortfall and excess you paid yourself |
| Pay-out larger than repair cost | Surplus may be taxable rental income |
Always net off insurance recoveries against the matching repair cost. The premium itself stays deductible regardless of whether you claim.
Recording premiums for MTD
Insurance premiums go in the insurance expense category of your records. Under Making Tax Digital (from April 2026 for the over-£50,000 cohort), keep the policy schedule and payment evidence as digital records.
If you pay annually, the cash basis — which most landlords use by default below £150,000 gross rent — lets you deduct the premium in the year you pay it, which keeps things simple.
Claim every premium, handle every pay-out right
LandlordTaxAi categorises your insurance premiums automatically and flags pay-outs so recoveries are netted off correctly — accurate profit, every quarter.
See how it worksA worked example
Aisha pays £350 buildings insurance and £120 rent-guarantee cover. A storm causes £2,000 of damage; the insurer pays £1,800 after a £200 excess.
| Buildings premium | £350 deductible |
| Rent-guarantee premium | £120 deductible |
| Storm repair cost | £2,000 |
| Insurer pay-out | −£1,800 |
| Repair cost Aisha can claim | £200 (the excess) |
Aisha deducts both premiums (£470) plus the £200 excess — but not the £1,800 the insurer covered, which would be double relief.
Frequently asked questions
Is landlord insurance tax deductible?
Yes. Buildings, contents, liability, rent-guarantee and legal-expenses premiums for your let are allowable revenue expenses.
Can I claim a repair my insurance paid for?
Only the part the insurer didn’t cover — typically the excess or any shortfall. You can’t deduct costs the pay-out already covered.
Is an insurance pay-out taxable?
If the pay-out exceeds the repair cost, the surplus can be taxable income of the rental business. Match recoveries to the related repair.
Can I deduct insurance on my own home?
No — only insurance connected to the let property. If you let part of your home, apportion the premium fairly between private and rental use.
Which year do I claim the premium?
On the cash basis (the default under £150,000 gross rent), deduct the premium in the year you pay it.
Is rent guarantee insurance deductible?
Yes. Rent guarantee and tenant-default cover is taken out for the letting business, so the premium is allowable.
Written and reviewed by the LandlordTaxAi Editorial Team. Our guides are reviewed against current HMRC guidance and updated when the rules change. Operated by LandlordTaxAi, United Kingdom. Follow us on LinkedIn.
Last reviewed: 24 June 2026 · Researched against primary UK sources for the 2026/27 tax year: https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income; https://www.litrg.org.uk/savings-property/property-income/working-out-property-income. This article is informational only and does not constitute tax advice. Check the latest details on GOV.UK or with a qualified accountant.