Allowable Expenses for Landlords: The Complete 2025/26 List

Why Allowable Expenses Matter

Every pound you claim as a legitimate expense reduces the rental income you pay tax on. If you are a higher rate taxpayer, that saves you 40p for every pound claimed. Even at the basic rate, it saves you 20p. Over a year, missed expenses can add up to hundreds of pounds in unnecessary tax.

HMRC lets landlords deduct certain costs from their rental income as long as those costs are "wholly and exclusively" for the purpose of renting out the property. The key word is revenue expenditure — day-to-day running costs. Capital expenditure, like buying the property itself or making improvements, is treated differently.

This guide covers every allowable expense you can claim as a residential landlord in the 2025/26 tax year.

Insurance

Landlord Insurance

The cost of landlord buildings insurance is fully deductible. This covers the structure of the property against risks like fire, flood, and subsidence.

Contents Insurance

If you provide a furnished property, the contents insurance premium is allowable.

Rent Guarantee Insurance

Policies that protect you if a tenant stops paying rent are fully deductible. Given the cost of eviction proceedings, these policies are common and the premiums are a legitimate expense.

Public Liability Insurance

If you take out liability cover relating to your rental property, this is also allowable.

Repairs and Maintenance

This is one of the biggest expense categories for landlords, and also where people most often get confused.

What Counts as a Repair

A repair restores something to its previous condition. You can claim the full cost of:

• Fixing a leaking roof
• Replacing broken windows with like-for-like equivalents
• Repairing or replacing a boiler with a similar model
• Redecorating between tenants (painting, wallpapering)
• Fixing plumbing, electrics, or structural issues
• Replacing worn-out kitchen units with similar standard units
• Replacing a damaged bathroom suite with a similar one

What Counts as an Improvement (Not Allowable)

An improvement enhances the property beyond its original condition. These are capital costs, not revenue expenses. Examples include:

• Adding an extension or conservatory
• Converting a loft into a bedroom
• Installing central heating where there was none before
• Upgrading a basic kitchen to a high-end one

The distinction can be tricky. Replacing a single-glazed window with double-glazing is generally treated as a repair using modern equivalent materials. But adding a window where there was not one before is an improvement. If you are unsure, keep detailed records and consider getting advice.

The Replacement of Domestic Items Relief

Since April 2016, landlords of furnished properties can claim relief when they replace domestic items such as furniture, appliances, kitchenware, and soft furnishings. You claim the cost of a like-for-like replacement minus any proceeds from selling or scrapping the old item. If you upgrade (say, replacing a basic washing machine with a premium model), you can only claim the cost of a similar basic replacement.

Letting Agent and Management Fees

Letting Agent Fees

If you use a letting agent to find tenants and manage your property, their fees are fully deductible. This includes:

• Tenant finding fees
• Monthly management fees (typically 8-15% of rent)
• Inventory check fees
• Checkout and deposit handling fees

Property Management Software

If you use software to manage your rental property, track income and expenses, or communicate with tenants, the subscription cost is an allowable expense.

Professional Fees

Accountancy Fees

The cost of having an accountant prepare your rental accounts or tax return is deductible. This applies to the proportion of their fee that relates to your rental income.

Legal Fees for Short Leases

Legal costs for letting your property on a lease of a year or less are allowable. Legal costs for buying or selling a property are not — these are capital costs.

Legal Fees for Eviction

Costs of evicting a tenant, including court fees and solicitor charges, are deductible. These are considered part of the normal running costs of a rental business.

Finance Costs

Mortgage Interest (Tax Credit Only)

Since Section 24 came into full effect in April 2020, you can no longer deduct mortgage interest as an expense. Instead, you receive a tax credit at the basic rate (20%) on your mortgage interest payments. This is an important distinction — it does not reduce your taxable income, it reduces your tax bill. See our Section 24 guide for full details and worked examples.

Loan Arrangement Fees

Fees for arranging or renewing a buy-to-let mortgage are treated the same as mortgage interest under Section 24. You get a 20% tax credit rather than a deduction.

Bank Charges

If you have a separate bank account for your rental business, the bank charges and fees on that account are allowable.

Travel Costs

Travel to Your Property

You can claim the cost of travelling to your rental property for management, maintenance, or rent collection purposes. This includes:

• Mileage at 45p per mile for the first 10,000 miles, then 25p per mile (if using your own car)
• Public transport fares
• Parking charges

You cannot claim commuting costs if your rental activity is your main job and the property is your regular workplace. For most landlords who have other employment, travel to the property counts as a business journey.

Travel to Meet Agents, Accountants, or Solicitors

Journeys to meet professionals about your rental property are also deductible at the same mileage rates.

Property Running Costs

Council Tax

If you pay the council tax on your rental property (for example, during void periods between tenants), this is an allowable expense. When the tenant pays, you obviously cannot claim it.

Utility Bills

Gas, electricity, water, and broadband costs are deductible when you pay them. This is common with houses in multiple occupation (HMOs) where the landlord covers utilities.

Ground Rent and Service Charges

If your property is leasehold, the ground rent you pay to the freeholder is an allowable expense. Service charges for communal areas, maintenance, and building insurance are also deductible.

Garden Maintenance

Costs of maintaining communal gardens or grounds are allowable if you are responsible for them.

Advertising and Marketing

Finding Tenants

The cost of advertising your property is deductible. This includes:

• Online listing fees (Rightmove, Zoopla, OpenRent)
• Newspaper or magazine advertising
• Signage
• Photography for listings

Stationery and Office Costs

Administrative Expenses

Phone calls, postage, stationery, and printing costs related to managing your rental property are all allowable. If you use your personal phone or computer, claim only the proportion used for your rental business.

Bad Debts

Unpaid Rent

If a tenant leaves owing rent and you have exhausted reasonable efforts to collect it, you can claim the unpaid rent as a bad debt. You need to show that the debt is genuinely irrecoverable — simply having a tenant who is slow to pay is not enough.

What You Cannot Claim

To avoid problems with HMRC, be clear about what is not allowable:

• The purchase price of the property
• Capital improvements (extensions, new features)
• Your own labour on the property
• Clothing (even work clothes for property visits)
• Personal use of the property
• Mortgage capital repayments (only the interest element gets the 20% credit)
• Pre-letting expenses incurred before the property was first rented out (with some exceptions)
• Food and drink

Keeping Records

HMRC can ask to see your records going back six years, and longer if they suspect an error. For every expense, keep:

• Receipts or invoices
• Bank statements showing the payment
• A note of the business purpose

With Making Tax Digital for Income Tax on the horizon, digital record-keeping is becoming essential. Accounted helps landlords keep tidy records throughout the year. Penny, the AI bookkeeper, automatically categorises your rental expenses when you connect your bank account. Instead of sorting through a shoebox of receipts in January, your records stay up to date all year round.

Make Sure You Claim Everything

Many landlords leave money on the table by forgetting to claim legitimate expenses. Go through this list carefully against your own records. If you have been missing items in previous years, you can amend your tax return for the previous tax year as long as you are within the amendment deadline.

Start your free trial of Accounted today, connect your bank account, and let Penny identify and categorise your landlord expenses automatically. You might be surprised how much you have been missing.

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