There are many costs associated with being a landlord, from maintaining your rental property to paying for landlord insurance. However, many of these expenses can be claimed as allowable expenses on your Tax Return, helping to reduce the tax you must pay. 

We’ve compiled this guide with everything you need to know about landlord expenses and what you can claim as allowable expenses on your Self Assessment Tax Return.

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What are landlord allowable expenses?

A landlord allowable expense is one generated exclusively as a result of renting out your property. HMRC allows landlords to deduct a range of expenses from their rental income. However, you cannot claim personal costs, and if there’s mixed usage (such as your car or phone), you can only claim part expenses.  

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How do you claim your allowable expenses as a landlord?

You can claim your allowable expenses by summarising them on the supplementary tax form SA105. This should be submitted along with your main annual Self Assessment tax return (SA100), which details your other incomes, allowances and other tax relief you’re entitled to.

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What expenses can I claim as a landlord?

Maintenance and property repair costs

You can claim the costs of maintaining and repairing your rental property as an allowable expense, provided that you are not improving the property. 

This might include:

• Repairing or replacing a broken-down boiler 
• Replacing a broken window caused by vandalism (including replacing a broken single-glazed window with a double-glazed one)
• Replacing guttering or roof tiles which a storm has damaged
• Repairing damage as a result of a water or gas leak
• Repairing or repointing brickwork
• Treating damp in your rental property

Replacing a bathroom or kitchen on a ‘like for like’ basis

Replacing elements of a bathroom or kitchen (such as a shower, toilet or kitchen sink) is an allowable expense if it is replaced on a ‘like for like’ basis. This means that the value of the new item cannot exceed the market value of the item that’s being replaced, as this would classify as an improvement. 

If the replacement item is of higher value, you can only claim the difference between that item and the market value of the new item. For example, if the market value of the old shower is £250 and you wish to replace it with a new shower worth £500, you would only be able to claim half (£250) of that as an allowable expense. 

Replacing small items

Replacing small items, such as cutlery or bed linen, is also an allowable expense. To qualify, the items need to be:

• Low value 
• Have a short useful lifespan
• Need to be replaced frequently 

Replacement of domestic items

If you let out a furnished residential property, you might be able to claim a separate deduction for the cost of replacing domestic items (domestic items relief), including:

• Furnishings, such as curtains or carpets
• Household appliances and white goods, such as fridges and televisions
• Moveable furniture, such as beds and free-standing wardrobes
• Kitchenware, such as cutlery and crockery

Like replacing bathrooms or kitchens, the new small item must be of the same or similar value as the one they’re replacing.

Redecorating between tenants 

You’ll likely need to redecorate your rental property approximately every five years or between tenancies if needed. Redecorating is classed as maintaining rather than improving a property, so it’s an allowable expense.

Water bills, council tax, gas and electricity

Although in most instances, the tenants are responsible for paying utility bills and council tax, there might be occasions when these need to be paid by the landlord, for example, when the property is empty between tenancies. These are all classed as allowable expenses. 

Landlord insurance

Many landlord insurance policies, including building and contents insurance, are allowable expenses. Property valuation costs for insurance reasons are also allowed. 

Ground rents and service charges

In rental properties where ground rents and service charges apply, these can be claimed as allowable expenses. 

Cleaning and gardening services 

Professional end-of-tenancy cleaning services can be quite costly, but fortunately, this counts as an allowable expense. Regular gardening services are also allowable.

Management and letting agent fees

Many busy landlords use a letting agent so they don’t have to find and manage their tenants themselves. All costs associated with this, such as tenant-finder fees and management fees, are allowable expenses. 

Some legal fees

Some legal fees can be classified as allowable expenses, for example legal fees for lets of a year or less or for renewing a lease for less than 50 years.

Accountant’s fees

If you use an accountant to file your annual Self Assessment tax return, this can be claimed as an allowable expense. 

Phone calls and advertising materials

Costs associated with advertising your rental property and managing your tenants are allowable expenses. If you use your mobile phone to communicate with existing tenants, a proportion of your mobile phone bills can be claimed as an allowable expense.

Relevant subscriptions

Many UK associations represent landlords and require an annual membership fee or monthly subscription. These are classified as allowable. 

A portion of your vehicle running costs 

If you use your vehicle for your rental business, such as driving to and from the property to arrange viewings, you can claim this portion of your vehicle running costs as allowable expenses. This includes mileage rate deductions for business motoring costs. You can also claim any parking charges related to managing your rental property. 

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Specialist Landlord Insurance by Lets Insure

If you’re a landlord, managing your finances can be challenging, especially when there’s the risk of a loss of rental income if your tenants fall into arrears. Our rent guarantee insurance can help mitigate this risk. 

Rent guarantee insurance

The risk of rent arrears can be highly stressful if you rely on your rental income to pay your buy-to-let mortgage or for living expenses. Our rent protection insurance offers extra peace of mind and reduces the likelihood of negative financial repercussions due to rent arrears.

Opting for this insurance means we will pay you up to a maximum amount of £2,500 per calendar month from the date the tenant first falls into arrears until you gain legal vacant possession. 

Lets Insure also offers a premium Rent Guaranteed service. This is the best option if you want complete protection against rent arrears. Our Rent Guaranteed Service ensures you’re paid rent on time each month regardless of whether your tenant does.

We also offer home emergency cover and deposit replacement insurance. Visit our site to view our full range of landlord insurance policies that can help simplify the challenges of property rentals.