Landlord Allowable Expenses UK 2025/26: The Full Deductions List

What Are Landlord Allowable Expenses in 2025/26?

Landlord allowable expenses are the costs you can deduct from your rental income before calculating your tax bill. For the 2025/26 tax year (ending 5 April 2026), the rules are largely unchanged from previous years, but there are important nuances that many landlords miss.

Getting your deductions right is critical. Overclaiming can trigger an HMRC enquiry. Underclaiming means you pay more tax than necessary. This guide covers the full list of deductible expenses, including the grey areas that trip up even experienced landlords.

If you are unsure about any specific expense, speak to a property accountant who can confirm whether it applies to your situation.

The Complete Deductions Checklist

Repairs and Maintenance

You can deduct the cost of repairs to keep your property in its original condition. This includes fixing a leaking roof, repairing a broken boiler, or repainting after a tenancy ends.

Grey area: sub-£100 repairs. Many landlords assume small repairs under £100 are not worth claiming. They are. A £45 plumber call-out fee or a £30 replacement light fitting is fully deductible. Keep the receipts.

Key distinction: Repairs are deductible. Improvements (making the property better than its original state) are not deductible as an expense, they form part of your capital gains calculation when you sell. For example, replacing a like-for-like kitchen worktop is a repair. Installing a new kitchen extension is an improvement.

Insurance

Landlord insurance premiums are fully deductible. This includes buildings insurance, contents insurance, and rent guarantee insurance.

Grey area: income tax on landlord insurance claims. If you make a claim and receive a payout, that money is not taxable as income. It is a reimbursement for a loss, not rental income. However, if the payout exceeds the value of the loss (uncommon but possible), the excess may be taxable. The key point: you deduct the premium, and the claim payout is tax-free.

For a deeper look at how insurance interacts with your tax return, see our complete landlord tax deductions guide.

Mortgage Interest and Finance Costs

Under Section 24, you cannot deduct mortgage interest from your rental income as an expense. Instead, you receive a 20% tax credit on the interest paid. This applies to all residential landlords who own properties personally.

However, the following finance costs are still deductible as expenses:

• Mortgage arrangement fees
• Valuation fees for mortgage applications
• Broker fees
• Redemption penalties
• Bank charges on your rental property account

Grey area: mortgage arrangement fees. These are deductible in the year you pay them, even if the mortgage runs for several years. Do not spread them over the mortgage term unless you prefer to for accounting simplicity.

For a full explanation of how Section 24 works, read our Section 24 tax relief guide.

Replacement of Domestic Items

Since April 2016, you cannot deduct the full cost of replacing furniture, furnishings, appliances, or kitchenware. Instead, you use the Replacement of Domestic Items Relief (RDI).

You deduct the cost of the replacement item, minus any proceeds from selling the old item. The replacement must be substantially the same as the original. For example, replacing a worn-out washing machine with a similar model is deductible. Upgrading to a more expensive model means you only deduct the cost of a like-for-like replacement.

Grey area: what counts as "domestic items"? HMRC defines these as: furniture (beds, sofas, tables), furnishings (curtains, carpets, blinds), appliances (fridges, washing machines, cookers), and kitchenware (pots, pans, cutlery). It does not include fixtures like boilers or bathroom suites, those are capital improvements.

Letting Agent and Property Management Fees

Fees paid to letting agents for tenant finding, rent collection, and property management are fully deductible. This includes the VAT on these fees.

If you self-manage, you cannot deduct a notional fee for your own time. HMRC does not allow a deduction for your own labour.

Professional Fees

You can deduct fees paid to:

• Accountants and tax advisers
• Solicitors for tenancy agreements, evictions, or lease renewals
• Surveyors for property valuations (if for rental purposes, not purchase)
• Architects or builders for repair work (but not improvements)

Legal fees for buying or selling the property are not deductible as expenses, they form part of the capital gains calculation.

Utilities and Council Tax

If you pay for gas, electricity, water, or council tax on the property (for example, during void periods or for a HMO where bills are included), these are deductible.

For a HMO, you can deduct the full cost of utilities even if tenants pay a fixed "bills included" rent. The key is that you, as the landlord, are paying the utility company directly.

Ground Rent and Service Charges

Ground rent paid to the freeholder and service charges for maintaining common areas (in flats or leasehold properties) are fully deductible.

Travel and Vehicle Expenses

You can deduct travel costs for visiting your rental property for inspections, repairs, or tenant meetings. This includes:

• Mileage at 45p per mile for the first 10,000 miles, then 25p per mile (HMRC approved rates for 2025/26)
• Actual costs if you use a vehicle solely for your rental business (fuel, insurance, maintenance)
• Public transport costs (train, bus, taxi)

Grey area: mixed-use vehicles. If you use your car for both personal and rental business journeys, you must apportion the costs. Keep a mileage log showing business trips only.

Home Office Costs

If you manage your rental properties from home, you can claim a deduction for the business use of your home. HMRC allows two methods:

• Simplified method: £10 per month for 25-50 hours of business use per month, £18 for 51-100 hours, £26 for 101+ hours
• Actual costs method: Apportion a fair percentage of your household bills (mortgage interest, council tax, utilities, insurance) based on the number of rooms used and time spent

For most landlords with a small portfolio, the simplified method is easier and sufficient. For larger portfolios, the actual costs method may yield a higher deduction.

Other Deductible Expenses

• Advertising costs for finding tenants
• Cleaning costs between tenancies
• Gardening and grounds maintenance
• Redecoration costs (paint, wallpaper, materials)
• Safety certificates (gas safety, electrical safety, EPC)
• Fire safety equipment and compliance costs for HMOs
• Insurance excess payments on claims
• Bank interest on loans used for the rental business (but not mortgage interest under Section 24)
• Deposit protection scheme fees
• Membership fees for landlord associations (e.g., NRLA)

What Is NOT Deductible?

Some costs are never deductible as expenses. These include:

• Capital improvements (extensions, new kitchens, new bathrooms, loft conversions)
• Personal use of the property (if you stay in the property, you cannot deduct costs for that period)
• Your own labour (you cannot pay yourself a salary for managing the property)
• Mortgage capital repayments (only interest is relevant, and even that is via the tax credit)
• Fines and penalties (e.g., HMRC late filing penalties)
• Purchase costs (stamp duty, legal fees for buying the property)
• Sale costs (estate agent fees, legal fees for selling)

How to Record Your Expenses

From 6 April 2026, Making Tax Digital (MTD) for Income Tax becomes mandatory for landlords with gross property income over £10,000. This means you must keep digital records and submit quarterly updates to HMRC.

Even before that date, it is good practice to keep a detailed record of every expense. Use a spreadsheet or accounting software. Keep receipts for at least 5 years after the tax return deadline.

For more on MTD requirements, see our MTD for landlords guide.

Worked Example: Claiming Expenses Correctly

Let's say you own a buy-to-let property in Manchester earning £12,000 per year in rent. Your expenses for 2025/26 are:

• Repairs: £850 (new boiler repair)
• Insurance: £300
• Letting agent fees: £1,200
• Mortgage interest: £4,000 (not deductible as expense, but 20% tax credit applies)
• Travel: £200 (mileage to property)
• Home office: £120 (simplified method, 12 months at £10)
• Replacement washing machine: £350 (old one sold for £50, so net cost £300)

Total deductible expenses: £850 + £300 + £1,200 + £200 + £120 + £300 = £2,970

Net rental income before Section 24: £12,000 - £2,970 = £9,030

Tax at 20% basic rate: £9,030 × 20% = £1,806

Less Section 24 tax credit: £4,000 × 20% = £800

Total tax due: £1,806 - £800 = £1,006

If you had forgotten to claim the travel, home office, and replacement items, your tax bill would be £1,150, a difference of £144.

Common Mistakes Landlords Make

• Claiming improvements as repairs: HMRC scrutinises this. If you replace a single-pane window with double-glazing, that is an improvement, not a repair.
• Ignoring small expenses: Sub-£100 costs add up. A £30 receipt here and a £45 receipt there can total hundreds over a year.
• Not apportioning mixed-use costs: If you use your car or phone for both personal and business, you must split the costs. HMRC can disallow the full claim if you do not.
• Forgetting the Section 24 tax credit: Many landlords still try to deduct mortgage interest as an expense. Use the tax credit method instead.

When to Get Professional Help

If your portfolio is growing, or if you have complex expenses like HMO licensing, commercial property, or non-resident status, a specialist property accountant can save you more in tax than their fee costs.

For guidance on what to look for, read our articles on what a property accountant does and how much a property accountant costs.

Final Thoughts

The key to maximising your landlord allowable expenses is knowing what qualifies and keeping meticulous records. The 2025/26 rules are stable, but the upcoming MTD deadline and the separate property income tax rates from April 2027 mean you should be planning ahead.

If you are unsure about any expense, check with a professional. A small mistake can cost you far more than the fee to get it right.