Letting Agent Fees: Are They Tax Deductible?

Letting Agent Fees Are Deductible

Letting agent fees are an allowable expense against your rental income. This includes the ongoing management fee and various one-off charges.

What You Can Claim

Ongoing Management Fees

Most letting agents charge a percentage of the monthly rent for property management — typically 8-15%. This is fully deductible.

If your monthly rent is £1,200 and the agent charges 10%, you pay £120 per month (£1,440 per year) — all deductible against your rental income.

Tenant Finding Fees

The fee charged for finding a new tenant, including advertising, viewings, and referencing. Fully deductible.

Rent Collection Fees

If your agent charges separately for collecting rent, this is deductible.

Inventory Fees

The cost of preparing an inventory at the start and end of a tenancy. Deductible.

Check-In and Check-Out Fees

Fees for managing tenant move-in and move-out. Deductible.

Renewal Fees

The fee for renewing a tenancy agreement. Deductible.

What You Cannot Claim

Fees for Purchasing the Property

Estate agent fees when buying the property are not deductible against rental income. However, they form part of your acquisition costs for CGT purposes when you sell.

Fees for Selling the Property

Similarly, selling agent fees are a CGT cost, not a rental expense.

The Impact on Your Tax Bill

For a higher rate taxpayer, every £100 of deductible agent fees saves £40 in tax. On annual agent fees of £1,500, that is £600 saved.

Even after tax relief, agent fees reduce your net rental return. Consider whether the convenience of an agent justifies the cost compared to self-management.

Track all your agent fees and property expenses with Accounted.

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Every agent fee reduces your tax bill. Sign up for Accounted and let Penny ensure all your property costs are claimed.