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UK Landlord Tax Deductions: The Complete 2026 Guide to Allowable Expenses

📅 Updated May 2026 ⏱ 13 min read 🏷 Tax

Knowing what you can — and can't — claim against rental income is one of the highest-impact things a UK landlord can master. The wrong call costs you in tax overpaid, or in HMRC challenges if you overclaim. This guide walks through every category of allowable expense in 2026, the critical repairs-vs-improvements distinction, and the recordkeeping you'll need for MTD ITSA from April 2026.

Quick summary: A landlord expense is allowable if it's incurred wholly and exclusively for the rental business and is "revenue" in nature (not capital). Repairs are allowable; improvements are not. Mortgage interest is restricted to a 20% basic-rate tax credit under Section 24 for individuals. Your own time is never deductible — only what you actually pay out.

The "wholly and exclusively" rule

HMRC allows an expense as deductible from rental income only if it's incurred wholly and exclusively for the rental business. For mixed-purpose expenses (e.g. a single insurance policy covering your home and BTL), you can usually apportion to claim the rental share. For dual-purpose expenses where the rental purpose can't be reasonably separated (e.g. a meal during a property viewing trip), no deduction is allowed.

The big one: repairs vs improvements

This is the most contested area of landlord tax. The distinction matters because:

Examples of repairs (allowable):

Examples of improvements (not allowable as revenue, but added to CGT base):

✓ OwnProperly tip: HMRC accepts that you must use modern materials when carrying out repairs. Replacing a single-glazed wooden window frame with a UPVC double-glazed equivalent is treated as a repair, because UPVC is the modern equivalent — not an upgrade. The key test is "would you buy this material if you were doing the same job today?"

Comprehensive list of allowable expenses

Property running costs

Service charges and ground rent

Insurance

Letting and management fees

Repairs and maintenance

Safety and compliance

Professional fees

Financial costs

Travel and mileage

You can claim mileage using HMRC's simplified rates (2026/27):

Eligible journeys include property inspections, viewings, meeting agents, meeting contractors, attending court, attending HMO licence visits. Keep a mileage log: date, route, miles, purpose. Generic "to property" is fine — but a full log is your defence against HMRC challenge.

⚠ Watch out: Regular daily/weekly trips to the same property to "manage" can be reclassified by HMRC as not allowable if they look like commute or social visits. Sporadic, purposeful trips with a written reason are safe. Daily 30-mile trips for "checking on the property" are not.

Equipment and supplies

Replacement of Domestic Items Relief

You can claim the cost of replacing furniture, appliances and furnishings in let property — but only when they're being replaced, not when first installed. The relief covers:

Initial purchase of furniture for an unfurnished property let out unfurnished does not qualify. The relief is targeted at maintaining existing furnished standard, not equipping a new let.

What you cannot claim

Mortgage interest under Section 24

This deserves its own callout. For individual landlords (not Ltd Co), mortgage interest on residential rental property is no longer deductible as a revenue expense. Instead you receive a tax credit equal to 20% of the year's finance costs. For basic-rate taxpayers this is roughly neutral; for higher-rate taxpayers it's painful. See our full Section 24 guide with worked examples.

Recordkeeping requirements

HMRC requires you to keep:

You must keep records for at least 5 years after the 31 January submission deadline for the tax year (so a 2025/26 return submitted Jan 2027 has records kept to Jan 2032). HMRC investigations can go back further in cases of careless or deliberate error.

MTD ITSA and recordkeeping

From April 2026, landlords above the £50,000 threshold must keep digital records under Making Tax Digital for Income Tax. Paper receipts are still fine if photographed/scanned into MTD-recognised software. The threshold drops to £30k in April 2027 and £20k in April 2028.

From a tax-deductions perspective, MTD ITSA doesn't change what's allowable — it changes how often you report it (quarterly) and the format (digital, via HMRC API). The Final Declaration at year end is where you apply Section 24, replacement of domestic items relief and other year-end adjustments.

Common tax mistakes to avoid

Claiming an extension as a repair

It isn't. Extensions are capital improvements regardless of whether they "fix" anything. Treat as capital and add to CGT base.

Missing replacement of domestic items relief

If you replaced a fridge, washing machine or sofa during the year, claim it. Many landlords forget.

Forgetting void-period costs

Council tax, utilities, insurance during voids between tenants are allowable — but only if the property is held out for letting (i.e. being actively marketed).

Not apportioning home office

If you run your rental business from home, you can claim a reasonable proportion of household running costs (heat, light, broadband). HMRC's simplified "use of home" allowance gives a flat £6/week (~£312/year) without records. Larger claims require an apportionment basis.

Missing accountant fees

If your accountant prepares the rental pages of your Self Assessment, that fee is allowable. Apportion if they do other personal tax work too.

Misclaiming pre-letting expenses

Expenses incurred before the property is first let are generally treated as pre-trading. You can claim up to 7 years of pre-trading revenue expenses as if incurred on the first day of letting — but capital costs (e.g. initial purchase, major refurb to first let) go onto CGT base.

Landlord tax deduction checklist

Capture every expense at the property level

OwnProperly auto-categorises rent and expense transactions against HMRC's MTD ITSA categories — so your tax return practically writes itself at year end.

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How OwnProperly Helps

The single biggest cause of overpaid landlord tax is missed deductions — receipts not captured, mileage not logged, void-period costs forgotten. OwnProperly tracks expenses per property, per category, with HMRC's MTD ITSA categories built in. At year end you get a tax-ready report broken down to the level your accountant (or you, with TurboTax-like ease) can drop straight into the Self Assessment or MTD Final Declaration.

Related reading: Section 24 explained, MTD ITSA complete guide, Ltd Co vs personal BTL.

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