Expenses you can and cannot claim against property rents

If you are a landlord, it is important that you are aware of expenses you can and cannot claim from your rental income. As a rule, these expenses must be wholly and exclusively for the purposes of renting out the property in question. In some circumstances part expenses can be claimed where a proportion of expenses incurred relate to your property business.

Types of deductible revenue expenditure commonly paid for by a landlord include:

• General maintenance and repairs to the property (but not improvements).
• Water rates, council tax, gas and electricity.
• Insurance costs.
• Letting agent and management fees.
• Qualifying legal and accountancy fees.
• Direct costs such as phone calls, stationery and advertising for new tenants.

The tax relief on mortgage costs for residential landlords has been restricted to the basic rate of tax since April 2020. The Replacement of Domestic Item Relief allows landlords the ability to claim tax relief when they actually replace furniture, furnishings, appliances and kitchenware in a rented property. There are a number of conditions that must be met to claim the relief.

You should also ensure that you keep a record of any capital expenditure which has been incurred on an investment property. These expenses cannot be claimed as revenue expenditure against property income but can usually be offset against any Capital Gains Tax when selling a property.

We would of course be happy to help you ensure that all relevant expenses associated with your rental properties are properly accounted for.