Landlord Allowable Expenses: The Full List for 2026/27

Working out what you can and can't deduct from your rental income is one of the most basic, and most commonly muddled, parts of being a landlord. Get it right and you pay tax on your real profit, no more and no less. Get it wrong and you either overpay HMRC every year or, worse, claim things you shouldn't and risk a penalty further down the line. This guide sets out, in plain English, the full list of allowable expenses you can claim against UK rental income in 2026/27, what you definitely cannot claim (mortgage interest chief among them), and why the distinction between the two often comes down to a single principle.

What "allowable expenses" actually means

HMRC's basic rule is that an expense is allowable if it is incurred wholly and exclusively for the purposes of running your rental business, and is revenue in nature rather than capital. In practice that means: it's a genuine cost of letting the property out (not a personal cost dressed up as a business one), and it's a day-to-day running cost rather than money spent improving or adding to the asset itself. If a cost passes both tests, you deduct it from your rental income before working out your taxable profit. Our Rental Income Tax Calculator lets you enter your income and expenses to see exactly how this plays out on your own figures.

The crucial distinction: revenue versus capital

This single distinction trips up more landlords than almost anything else in property tax, so it's worth getting comfortable with it early.

Revenue costs are the ordinary running costs of the business and like-for-like repairs that keep the property in the condition it was already in. These are deductible against your rental income in the year you incur them. A classic example: your boiler breaks down and you replace it with a similar modern equivalent. That's a repair, a revenue cost, fully deductible.

Capital costs are costs that improve the property, add something that wasn't there before, or change its character, going beyond simply restoring it to its previous state. These are not deductible against your rental income. Instead, they're added to your purchase cost and can reduce the taxable gain when you eventually sell the property, lowering a future Capital Gains Tax bill rather than this year's income tax bill. A classic example: you knock through a wall to build an extension, or convert a loft into an extra bedroom. That adds value and changes the property, so it's capital.

The line isn't always perfectly crisp (replacing a basic kitchen with a significantly more lavish one can shade into capital territory, for instance), and HMRC looks at the facts of each case. When you're not sure which side of the line a cost falls on, it's well worth asking an accountant rather than guessing, because getting it wrong in either direction costs you money: claim a capital cost as revenue and you risk HMRC disallowing it later; treat a genuine repair as capital and you needlessly delay the relief you're entitled to.

The full list of common allowable expenses

Below are the categories of cost that landlords most commonly, and legitimately, claim against their rental income. This isn't exhaustive, and your own situation may include costs that don't fit neatly into any category, but it covers the great majority of what comes up in practice.

• Letting agent and management fees. Whether you pay a percentage of the rent or a fixed monthly fee for a fully managed service, these are a direct cost of running the let and fully deductible.
• Landlord insurance. Buildings insurance, contents insurance on items you provide, and rent guarantee or legal expenses cover are all allowable, because they exist specifically to protect the rental business.
• Repairs and maintenance (like-for-like). Fixing a leaking roof, repainting between tenancies, repairing broken fixtures, replacing a worn carpet with a similar one, servicing the boiler, and similar work that restores rather than improves the property.
• Utility bills and council tax you pay personally. If you cover gas, electricity, water or council tax, for example during void periods between tenancies, or because the property is let as an HMO with bills included, these are deductible.
• Service charges and ground rent. Common on leasehold flats, these recurring costs of holding the property are allowable in full.
• Accountancy and other professional fees. The cost of having an accountant prepare your rental accounts and tax return, and of routine legal advice connected with letting (such as drawing up a tenancy agreement), is deductible.
• Advertising for tenants. Listing fees, photography for listings, and other costs of finding a new tenant are allowable.
• Services provided as part of the tenancy. Gardening, window cleaning, communal cleaning, or similar services you arrange and pay for as part of what you offer tenants.
• Direct costs of letting. Phone calls, postage, stationery, and reasonable travel costs (such as mileage) to visit the property for management, inspection or maintenance purposes.
• Replacement of domestic items relief. If you let a property furnished (or part-furnished), you can claim the cost of replacing items such as sofas, beds, fridges, washing machines, carpets and curtains on a like-for-like basis. The relief covers the cost of the replacement item up to the standard of the original (any genuine improvement element is excluded), less anything you receive for the old item.

What you cannot claim, and why mortgage interest is the big one

Just as important as knowing what you can claim is knowing what you can't, and there's one item that causes more confusion than all the others combined.

Beyond mortgage interest, the following are also not deductible against your rental income:

• Capital improvements. Extensions, loft conversions, new structures, and anything else that adds to or fundamentally improves the property, rather than simply restoring it. These reduce a future Capital Gains Tax bill instead.
• Your own labour. If you do the decorating or repairs yourself, you can claim the cost of materials, but not a notional value for your own time.
• Personal or non-business costs. Anything that isn't wholly and exclusively for the rental business, including the cost of your own accommodation, personal travel that happens to pass the property, or clothing and equipment with significant personal use.

Keeping good records matters more than ever

Whichever expenses you claim, you need to be able to back them up. That means keeping receipts and invoices, bank statements showing payments, mileage logs for any travel you claim, and a clear record of what each cost relates to and why it's a business expense. This isn't just good practice in case HMRC ever asks questions, it's also the foundation for accurate digital record-keeping under Making Tax Digital for Income Tax, which is being phased in for landlords with significant income from April 2026 onwards. Landlords who get into the habit of recording income and expenses digitally as they go, rather than reconstructing a year's worth of paperwork at the deadline, will find the transition to MTD far less stressful. Our MTD Eligibility Checker can help you work out when the rules start to apply to you.

Why getting this right is worth the effort

None of this is about clever tax planning or pushing the boundaries, it's simply about making sure you pay tax on your real profit rather than overstating it through missed claims, or understating it through incorrect ones. Categorising costs correctly, particularly distinguishing revenue repairs from capital improvements and remembering that mortgage interest sits entirely outside the expenses calculation, has a real, recurring effect on your annual tax bill. If your affairs are at all complex, whether that's a mix of furnished and unfurnished lets, work that straddles the revenue/capital line, or multiple properties with different financing, a property accountant can often save you considerably more than they cost simply by getting the categorisation right and making sure nothing allowable is missed. Once you know your expenses, you can see the full tax picture, including the effect of mortgage interest, using our Rental Income Tax Calculator and Section 24 Calculator.