With all the recent changes to the Regulations surrounding Taxes for Landlords, Landlords may be finding themselves facing larger tax bills than ever. It has never been more important to make sure you include all the allowable expenses you are entitled to as a Landlord to reduce your tax bill as much as possible. Here is our Ultimate List of Tax Allowable Expenses for Landlords, so have a read and make sure you don’t miss out anything that could save you tax.
Maintenance and Repairs
You should be able to deduct most of the money you spend keeping your rental property in good order. Typical allowable expenses for Landlords are:
- repairing water or gas leaks, burst pipes
- repairing electrical faults
- replacing broken windows, doors, gutters, roof slates/tiles
- repairing internal and external walls, roofs, floors
- repainting and redecorating (but not improving) the property to restore it to its original condition
- treating damp or rot
- re-pointing, stone cleaning
- hiring equipment to carry out necessary repair work
- replacing existing fixtures and fittings, such as radiators, boilers, water tanks, bathroom suites, and kitchens, but not electrical or gas appliances
If you pay a service charge to cover the running costs of a rental property then this is also allowable against your rental profits.
Look out, you cannot claim for costs which may be classified as Capital Expenses – these are things which improve rather than maintain your property. For example, an extension or replacing the carpet.
Note: if you have been a landlord for several years now, wear and tear allowance has now been abolished. Find out more here.
Cost of Replacing Furniture & Furnishings
If you incurred any costs for replacing furniture, furnishings and appliances provided for tenants use then these items will be tax allowable. Some typical examples are:
• Dining furniture
• Soft furnishings
• Kitchen appliances
Buildings and contents insurance are allowable expenses and can reduce your taxable rental income.
Until 5 April 2017, you are able set off the interest element of any mortgage payments made against rental income. You should be able to find this figure on your mortgage statement. From 6 April 2017 this interest relief is set to be removed and you will be able to claim a percentage of the mortgage interest you have paid until the relief is removed in full. You can claim as follows:
Tax Year 17/18 – 75%
Tax Year 18/19 – 50%
Tax Year 19/20 – 25%
Tax Year 20/21 and beyond – 0%
Find out more here:
Next: More Allowable Expenses for Landlords