Rental Property – Tax allowable expenditure

Rental Property tax allowable expenditure

For many individuals, it is important to identify tax allowable expenditure on rental properties since it minimises the tax they have to pay. If you are looking for accountants in Sutton Coldfield, Walsall, Birmingham, or the rest of the West Midlands to help with your rental property tax return please contact me to see how I can help.


Examples of tax allowable expenditure are:

  • Council tax
  • Electricity bills
  • Gas and electricity safety checks
  • Gas bills
  • General repairs (See below for more detail)
  • Ground rent
  • Interest on loan to buy the property
  • Landlords insurance
  • Letting agent fees
  • Management fees
  • Motor expenses for travelling for the property business
  • Replacement carpets, (but not those initially bought when property business started)
  • Replacement crockery, (but not those initially bought when property business started)
  • Replacement curtains, (but not those initially bought when property business started)
  • Replacement furnishings, (but not those initially bought when property business started)
  • Replacement furniture, (but not those initially bought when property business started)
  • Replacement household appliances and kitchenware (but not those initially bought when property business started)
  • Service charge
  • Water rates

 

General repairs and maintenance

General repairs and maintenance of the property are tax deductible, but not improvements:

  • repairing water/gas leaks, burst pipes
  • repairing electrical faults
  • replacing broken windows, doors, gutters, roof slates/tiles
  • repairing internal/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/gas appliances

 

Until the 5th of April 2016 a rental business could claim a wear and tear allowance of 10% of the rental income instead of claiming for the costs of domestic items in the rental property. However, from 6 April 2016 this has stopped, meaning that for the 2016/17 tax return you will not be allowed to claim wear and tear allowance. Instead, you will claim the cost of replacing domestic items.

If this article on “Rental property tax allowable expenditure” has helped you please share the page.

About me

I work at a firm of Chartered Accountants in Walsall, helping businesses and individuals with their accountancy and taxation needs. If you would like to see how we can help, please contact me. We work with businesses in Sutton Coldfield, Walsall, Birmingham, and the rest of the West Midlands.