If you are a new landlord you will undoubtedly be looking to maximise your rental income. Therefore, when it comes to doing work on your property it is important to know what is tax deductible versus what isn’t. This quick guide to tax deductions for landlords divides property work into three categories.
Fixtures and fittings
HMRC’s approach to the cost of replacing boilers, water and light fittings, etc. is that they are repairs to the building. Therefore, the costs of replacing them is usually tax deductible from rental income.
Structural improvements
Costs incurred on improving or changing the structure of the properties, e.g. knocking down walls, converting lofts etc, is not tax deductible from rental income. Instead, it can be deducted when working out any capital gain or loss when the property is sold, as long as the improvement is still there at the time of sale.
Repairs and redecoration
Normally, the cost of repairs and redecoration is tax deductible from rental income.