Property Rental Allowable Expenses 2025/26 | Landlord Tax Guide | Trueman Brown Accountants

Understanding Property Rental Allowable Expenses for 2025/26

When managing a rental property, understanding property rental allowable expenses can make a significant difference in your taxable income.

Knowing what you can claim ensures you stay compliant with HMRC while maximising your profit margins.

What Are Property Rental Allowable Expenses?

Property rental allowable expenses are costs you can deduct from your rental income before calculating tax.

To qualify, expenses must be wholly and exclusively for your rental business.

For 2025/26, landlords can still prepare accounts on a cash or accrual basis.

Those using the cash basis may also deduct many capital expenses (excluding property purchase and cars).

Common Property Rental Allowable Expenses

Here are some examples most landlords can claim:

  • Repairs and maintenance (not improvements)

  • Council tax, water rates, gas and electricity

  • Landlord insurance (buildings and contents)

  • Letting agent and property management fees

  • Cleaning, gardening, and advertising costs

  • Office supplies, postage, and phone calls

  • Accountancy fees and short-term legal costs

Keep detailed records of all property rental allowable expenses to support your tax return.

 

Top 10 expenses claimed by landlords infographic showing letting agency fees, advertising, accountancy, cleaning, gardening, travel, repairs, replacement domestic items, utilities, and finance costs.

Vehicle Use and Finance Costs

If you use a vehicle for property management, you can apply simplified mileage rates—45p per mile for the first 10,000 miles and 25p thereafter.

Mortgage interest and other finance costs are no longer deductible as expenses. Instead, landlords receive a 20% basic rate tax credit, which continues under current 2025/26 HMRC rules.

Property Rental Allowable Expenses: Points to Watch

    • Capital improvements (e.g., extensions) cannot be deducted, but may reduce Capital Gains Tax when selling.

    • Pre-letting expenses incurred within seven years before the first tenancy can often be claimed once the property begins generating income.

    • Digital record keeping under Making Tax Digital (MTD) remains mandatory for landlords with income over £50,000 (threshold reduces to £30,000 in 2026).

​How Trueman Brown Can Help

At Trueman Brown Chartered Accountants, we specialise in helping landlords understand and claim all relevant property rental allowable expenses while staying fully compliant with HMRC.

We provide:

  • Expert tax planning for landlords and property investors

  • Digital bookkeeping setup under MTD for 2025/26

  • Tailored advice to minimise your tax liability

📧 mark@truemanbrown.co.uk
📞 01708 397262

Frequently Asked Questions (FAQ)

1. Can I claim mortgage repayments as a property rental allowable expense?
No. Only the interest portion qualifies for a 20% tax credit, not the capital repayment.

2. Are furniture replacements deductible?
Yes, under the replacement of domestic items relief, you can claim the cost of replacing furnishings such as sofas or white goods.

3. Can I deduct travel to my rental property?
Yes, but only if the journey is for business purposes, such as inspecting or maintaining the property.

4. What happens if I rent a property at below market rate to family?
You can only claim expenses up to the amount of rent received—no loss relief is allowed.

Contact Us