What Repairs Can Landlords Deduct From Rental Income?

Knowing which repair costs you can deduct from rental income is one of the most valuable, and most misunderstood, parts of landlord tax. Get it right and every genuine repair reduces your taxable profit in full, at your marginal rate. Get it wrong and you either lose relief you were entitled to, or you claim something HMRC will later disallow, with interest and penalties on top.

The line that decides everything is the difference between a repair (a revenue expense, deductible against rental income) and an improvement (capital expenditure, not deductible against income). That single distinction matters more now than it did five years ago. Since Section 24 capped mortgage-interest relief at the basic rate, a repair you classify correctly is one of the few costs that still relieves at 40 or 45 percent for a higher-rate landlord. This guide gives you a clear decision process, HMRC's own tests by name, the case law on repairs at the point you buy, the relief for replacing furniture and appliances, a side-by-side comparison table and worked examples. The rules below are the current ones for 2026/27, verified against HMRC's Property Income Manual and the underlying legislation.

The repair-or-improvement decision process

Before you classify any job, run it through these questions in order. Most disputes are resolved at the first or second step.

1. Is the work restoring something, or enhancing it? If you are putting an asset back to broadly the condition and function it had before wear, damage or deterioration, that points to a repair. If you are adding something new, extending the property, or lifting it to a higher specification than it ever had, that points to an improvement (capital).
2. Is the replacement like-for-like, or the nearest modern equivalent? Replacing a worn part with a similar part is a repair. Crucially, replacing it with the nearest modern equivalent, because the old type is no longer made or sold, is still a repair even if the new part performs better (more on this below).
3. Are you replacing a part, or an entire asset? This is the entirety test. Repairing or replacing a part of a larger asset (a few roof tiles, one window, a boiler within a heating system) is a repair. Replacing the whole asset (the entire roof structure rebuilt to a better design, the whole property re-rendered to a new standard) leans towards capital.
4. Did the property need this work to be usable when you bought it? Repairs to remedy disrepair that existed at purchase, where that disrepair reduced the price you paid, are usually capital (the Law Shipping principle). Deferred repairs to a property you could already let are usually revenue (the Odeon principle).
5. Is it a free-standing domestic item? A sofa, bed, fridge, freestanding cooker, carpet or curtain is not part of the building. Replacing one is not a building repair; it is handled under Replacement of Domestic Items Relief instead.

If you want the abstract framework behind these questions, our guide to capital versus revenue expenditure for landlords sets out the general classification test. This page is the applied version for repairs. For where repairs sit alongside every other deductible cost, see the full list of allowable landlord tax deductions.

Repairs versus improvements at a glance

The table below maps the most common landlord jobs to their usual treatment. Treat it as a starting point, not a verdict: condition, scope and the price you paid can move a job from one column to the other, which is why the worked examples that follow matter.

Work done	Usual treatment	Why
Replacing single glazing with double glazing	Repair (revenue)	Nearest modern equivalent; same function and character
Replacing a failed boiler with a modern combi	Repair (revenue)	A part of the heating system, replaced like modern-for-old
Installing central heating where there was none	Improvement (capital)	Adds something the property never had
Repointing brickwork, fixing slipped tiles, treating damp	Repair (revenue)	Restores existing structure to working order
Adding an extension, conservatory or loft conversion	Improvement (capital)	Enlarges or changes the character of the property
Like-for-like kitchen or bathroom replacement	Repair (revenue)	Restores to similar standard; not a step-change in spec
Upgrading a basic kitchen to a high-spec one	Mixed; improvement element apportioned out	Betterment beyond the previous standard is capital
Repairs to fix disrepair that made a cheap purchase unusable	Improvement (capital)	Law Shipping: cost of bringing the asset into use
Replacing a worn sofa, carpet or freestanding cooker	Replacement of Domestic Items Relief	Free-standing item, not a building repair

What qualifies as an allowable repair

For a repair to be deductible it must restore the property to working order without improving it beyond its previous standard, and it must be incurred wholly and exclusively for the rental business. The statutory basis is section 272 of the Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005 s.272), which imports the trading-income deduction rules, including the wholly-and-exclusively test in section 34, into the property business.

Typical work that is normally an allowable repair includes:

• Plumbing: fixing leaks, clearing blockages, replacing a failed radiator or tap
• Electrics: repairing or rewiring existing circuits, replacing faulty switches and fittings
• Heating: boiler servicing and repair, replacing a broken boiler with a modern equivalent, replacing worn radiator valves
• Roof and structure: replacing slipped or broken tiles, repointing brickwork, treating damp, repairing guttering
• Decoration: repainting, re-papering, replacing worn carpets with similar quality
• Windows and doors: repairing or replacing broken glass, replacing a rotten window or door with the modern like-for-like equivalent
• External: repairing fences and paths, tree work needed for safety, repairing a drive

For HMOs, repairs to communal areas such as shared kitchens, bathrooms and hallways are deductible on the same basis, provided the work maintains rather than improves them. Plant and machinery in common parts of a multi-let building can sit outside the dwelling-house restriction discussed later, which is why HMO landlords should keep communal-area costs clearly separated in their records.

The nearest-modern-equivalent rule (and the double-glazing point)

One of the most common mistakes landlords make is to assume that any upgrade automatically becomes a non-deductible improvement. HMRC's position is more generous than that. PIM2030 states that alterations due to advancements in technology are generally treated as an allowable repair rather than an improvement, if the functionality and character of the asset is broadly the same, and gives the headline example: replacing single glazing with double glazing is a repair, not an improvement.

The logic is that you can no longer realistically buy the original single-glazed units, so double glazing is simply the modern standard for "a window." The new windows perform better, but their function and character (keeping weather out, letting light in, opening and closing) is broadly the same. The same reasoning applies to replacing an old back boiler with a modern condensing boiler, or lead pipes with modern plastic or copper: you are not improving, you are repairing using what the market now sells.

Examples that are improvements (capital, not deductible against income)

By contrast, the following normally count as improvements. They are not deductible against rental income, although they generally add to the property's base cost and can reduce a future capital gains tax bill on sale (residential CGT is charged at 18 percent within the basic-rate band and 24 percent above it, after the annual exempt amount of GBP 3,000):

• Installing central heating where there was none before
• Adding an extension, conservatory or loft conversion
• Upgrading a basic bathroom or kitchen to a clearly higher specification (not just a like-for-like replacement)
• Replacing a whole asset to a better design rather than repairing it
• Installing solar panels or other systems the property never had

Note what is not on this list: swapping single glazing for double glazing, or a failed boiler for a modern one, are repairs, not improvements, for the reasons above. The improvement test is about a genuine step-change in standard or character, not about the new part being newer. Hold onto the invoices for genuine improvements anyway, because they feed the base cost when you eventually sell and reduce the gain.

Borderline jobs and apportionment

Many real jobs mix repair and improvement. The approach is to identify the dominant purpose and to apportion out any distinct improvement element. There is no statutory percentage; HMRC looks at substance. Where an upgrade is genuinely incidental to a necessary repair, the whole cost can be a repair. Where there is a separate, significant betterment, that part is capital.

Worked example 1 · storm-damaged roof. A landlord pays GBP 6,000 to repair a roof after storm damage. The roofer uses modern breathable membrane and slightly better tiles than the 1960s originals, because that is what is now stocked. The dominant purpose is to make the roof watertight again, and the slightly better materials are the modern equivalent. The full GBP 6,000 is an allowable repair. If, instead, the landlord had taken the opportunity to add three new rooflights costing GBP 1,500, that GBP 1,500 is a distinct improvement and is apportioned out as capital, leaving GBP 4,500 as the repair.

Worked example 2 · boiler replacement. A 12-year-old boiler fails. Replacing it with a standard modern combi boiler for GBP 2,400 is a repair (the modern equivalent of the part that failed). If the landlord instead spends GBP 6,000 installing a brand-new pressurised system with additional zoning and smart controls the property never had, the element that goes beyond a like-for-like replacement is an improvement and is apportioned out.

Initial repairs when you buy: the Law Shipping and Odeon line

The most technical area is repairs around the time of purchase. HMRC follows two leading cases, both referenced in PIM2030:

• Law Shipping Co Ltd v IRC (1923) 12 TC 621. A ship was bought in poor condition and had to be repaired before it could be used. Because the disrepair was reflected in a reduced purchase price, the repair cost was treated as capital, part of the cost of acquiring a usable asset.
• Odeon Associated Theatres Ltd v Jones (1971) 48 TC 257. Cinemas were bought in a dilapidated but already-usable state and operated for years before deferred repairs were done. The Court of Appeal held the repairs were revenue and deductible, distinguishing Law Shipping on the basis that the price had not been substantially reduced to reflect the disrepair and the asset was usable from the start.

Worked example 3 · buying a tired flat. You buy a flat that is fully lettable but tired, and the price was a normal market price for its condition. You let it immediately, then six months later redecorate and replace the worn carpets. On the Odeon principle, that is a revenue repair. By contrast, if you buy a flat at a knock-down price precisely because the bathroom is unusable and the wiring is unsafe, and you must fix those before anyone can live there, that initial work is capital on the Law Shipping principle. The timing and the mechanics of costs incurred before your first tenant are covered in our guide to pre-letting expenses you can claim before the first tenant.

Replacing furniture and appliances: Domestic Items Relief

Free-standing furniture and appliances are not part of the building, so replacing them is not a "repair" of the property. Instead, the relevant relief is Replacement of Domestic Items Relief (RDI) in section 311A of ITTOIA 2005. RDI replaced the old wear-and-tear allowance and applies to a let dwelling.

The key points:

• RDI covers the replacement of a domestic item, not the first purchase. Buying the original sofa or fridge is not relievable; replacing it later is.
• The deduction is the cost of a like-for-like replacement, less any proceeds from selling or trading in the old item, less any element that improves on the original.
• It applies to items such as beds, sofas, freestanding cookers, fridges and freezers, curtains, carpets and crockery provided for the tenant's use.

Worked example 4 · replacing a sofa. A tenant's worn sofa is replaced for GBP 900, and the old one is sold for GBP 50. If the new sofa is a reasonable like-for-like replacement, the RDI deduction is GBP 850 (GBP 900 less GBP 50). If instead the landlord spends GBP 1,500 on a clearly superior leather suite, the relief is limited to the cost of an equivalent standard replacement, less the GBP 50 proceeds. Our dedicated Replacement of Domestic Items Relief guide works through the netting-off and improvement-restriction rules in detail.

Labour, professional fees, insurance and VAT

Labour costs for genuine repair work are allowable, including tradesperson wages, emergency call-out charges, and professional fees that relate directly to a repair (for example a surveyor assessing what needs fixing). Professional fees tied to an improvement, an extension, or a planning application for an enhancement follow the improvement and are capital.

Two adjacent running costs are worth flagging while you are tidying up the year-end. Landlord insurance premiums (buildings, contents you provide, rent guarantee, public liability and legal expenses cover) are allowable revenue expenses in the same way as repairs, deducted in full and unaffected by Section 24. Whichever type of policy you hold, keep the schedule with your repair records so the deduction is easy to support. VAT, by contrast, mostly sits outside the system for residential lets. Letting residential property is an exempt supply, so a residential landlord generally cannot register for VAT and cannot recover input VAT on repairs; the VAT becomes part of the cost and is deducted with it. The VAT registration threshold is GBP 90,000 of taxable turnover, but exempt residential rent does not count towards taxable turnover, so the threshold rarely binds for a pure-residential portfolio. Landlords with commercial property that has been opted to tax, or other taxable supplies, should take VAT advice in their own right.

Timing: the cash basis versus the accruals basis

When you can deduct a repair depends on which basis of accounting your property business uses, and the default may not be what you expect. This is one of the few genuine repair "vs" decisions, so it is worth seeing the two side by side.

Feature	Cash basis	Accruals (GAAP) basis
Who it is the default for	Individuals and partnerships with receipts of GBP 150,000 or less	Businesses above GBP 150,000, and all companies
When a repair is deducted	When you pay for it	When the cost is incurred (work done and invoiced)
December repair paid in April	Falls into the later tax year	Stays in the year the work was done
Can you switch?	Default; can elect out into accruals	Mandatory above the threshold or for companies

Since 2017/18 the cash basis has been the default for most unincorporated property businesses with annual rental receipts of GBP 150,000 or less. An eligible landlord who would prefer the accruals basis can elect out, with the election made within one year of the filing deadline for the relevant tax year. Note that the Finance Act 2024 reform that removed the cash-basis turnover thresholds applied to trading businesses only; the GBP 150,000 threshold and the cash-basis-default rule continue to apply to property businesses. The practical point is the year-end timing shown in the table: on the cash basis, when you pay a borderline-date invoice decides which year the relief lands in.

How Section 24 and the April 2027 rates interact with repairs

Section 24 restricts relief on residential finance costs (mortgage interest and similar), which are now given as a basic-rate tax reducer rather than a full deduction. It does not touch repairs. Allowable repairs are still deducted in full from rental income before tax, which is exactly why getting the classification right matters: a repair gives full relief at your marginal rate, whereas finance costs are capped at the basic rate. Our complete Section 24 guide explains the finance-cost mechanics.

A short worked example makes the gap concrete. Worked example 5 · a higher-rate landlord. Take a higher-rate landlord with GBP 30,000 of rent, GBP 12,000 of mortgage interest and GBP 4,000 of genuine repairs. The repairs come straight off the rent, so taxable profit is GBP 26,000 (GBP 30,000 less the GBP 4,000), before the interest is even considered. That GBP 4,000 of repairs saves tax at 40 percent, roughly GBP 1,600. The GBP 12,000 of interest, by contrast, is added back to profit and then relieved only as a basic-rate tax reducer, currently 20 percent. So the same pound spent on a repair is worth twice as much in relief to a 40 percent taxpayer as a pound of mortgage interest. That asymmetry is the single biggest reason to classify repairs correctly and claim every genuine one.

Looking ahead, the Finance Act 2026 (sections 6 to 8, Royal Assent 18 March 2026) introduces separate property income tax rates for England, Wales and Northern Ireland from 6 April 2027, set at 22 percent basic, 42 percent higher and 47 percent additional (only Scotland is carved out, where Scottish income tax rates apply to property income). The Section 24 finance-cost reducer rises to the new 22 percent basic rate at the same time, so a basic-rate landlord sees no new wedge open. None of this changes how a repair is claimed: repairs are still deducted in full before tax. The wider picture is set out in our complete guide to property investment tax.

Commercial property and capital allowances

The repairs-versus-improvements line works the same way for commercial property, but commercial landlords have an extra route that residential landlords largely do not: capital allowances on qualifying plant and machinery. For residential lettings, section 35 of the Capital Allowances Act 2001 bars plant-and-machinery allowances for plant provided for use in a dwelling-house, with just-and-reasonable apportionment where plant is used partly in a dwelling-house and partly for other purposes. The section itself sets out no express common-parts carve-out; in HMRC's own interpretation in its manuals, the common parts of a multi-let building such as the communal areas of a block of flats or an HMO are not part of any single dwelling-house, so plant there can fall outside the restriction.

So a commercial or mixed-use building can claim capital allowances on integral features and plant in non-dwelling areas, where the main-pool writing-down allowance is 14 percent from April 2026 (reduced from 18 percent by Finance Act 2026 s.28). A residential landlord cannot claim allowances on the boiler or kitchen inside a flat, which is one reason the repair-versus-improvement classification carries more weight for residential lets: the repair route is often the only relief available. For the detail, see our guide to capital allowances on property.

Records, common mistakes and Making Tax Digital

Whatever the job, the claim is only as strong as the evidence. Keep itemised invoices that split materials and labour, before-and-after photographs, written quotes, and a short note explaining why the work restored rather than improved the property. For mixed jobs, ask the contractor to itemise any upgrade element so you can apportion cleanly.

The mistakes that most often trigger an HMRC enquiry are: claiming an improvement as a repair; deducting pre-purchase remedial work that should be capital under Law Shipping; bundling a betterment element into a repair without apportioning; thin documentation; and claiming costs where the landlord also benefits personally.

Good records also feed straight into Making Tax Digital for Income Tax, which is now being phased in by qualifying income: from 6 April 2026 above GBP 50,000, from 6 April 2027 above GBP 30,000, and from 6 April 2028 above GBP 20,000. In scope you keep digital records and file quarterly updates through compatible software, so a clean digital trail of repair invoices and classifications makes both the quarterly updates and the year-end straightforward. If you are unsure whether you are caught, the test is gross rental (and any self-employment) income, not profit. See our Making Tax Digital for landlords guide for the timeline and what counts as qualifying income.

Where to get this checked

The repairs-versus-improvements line is one of the highest-value judgements a landlord makes each year, and the borderline jobs are exactly where relief is most often lost or over-claimed. If you are weighing a large refurbishment, an initial-repairs question on a recent purchase, or a portfolio's worth of mixed jobs, a specialist can apportion the costs correctly and document the reasoning so the position is defensible. Use the enquiry form on this page to be matched with a property tax specialist who works with landlords.