Allowances on income from property rental

If you let out property you can deduct certain expenses and tax allowances from your rental income to work out your taxable profit (or loss).

Allowable expenses
The expenses you can deduct from letting income (unless it's under the Rent a Room scheme) include:

  • letting agent's fees
  • legal fees for lets of a year or less, or for renewing a lease for less than 50 years
  • accountant's fees
  • buildings and contents insurance
  • some interest on property loans depending upon your personal tax position
  • maintenance and repairs (but not improvements)
  • utility bills (like gas, water, electricity)
  • rent, ground rent, service charges
  • Council Tax
  • services you pay for, like cleaning or gardening
  • other direct costs of letting the property, like phone calls, stationery, advertising

 

Non-allowable expenses
When you work out your profit, you can't deduct:

  • 'capital' costs, like furniture or the property itself
  • personal expenses - costs that aren't to do with your letting business
  • any loss you make when you sell the property

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