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Jul 19
Allowable Landlord expenses to offset against Tax
The rules for calculating tax for landlords is changing and the implications are huge. Previously, if you were a landlord who was letting a furnished property then you could also claim 10% of the net rent as what was known as a ‘wear and tear allowance’ even if no actual improvements have been made. However, in the 2015 summer budget, the Chancellor of the Exchequer, George Osborne announced a change to the legislation on “allowable expenses” which came into action in April 2016. Landlords will only be able to deduct expenses they actually incur.
So what is classed as allowable landlord expenses to offset against Tax?
- Letting agent & management fees
- Legal fees for arranging a lease for a year or less
- Accountants’ fees
- Buildings and contents insurance
- Money spent on maintenance and repairs (but not property improvements)
- Utility bills
- Rent, ground rent and service charges
- Council tax bills
- Any services you pay for such as cleaning and gardening
- Any other direct costs incurred such as phone calls, advertising or stationery
- Interest on any property loans you may have taken out (please read out Change to Tax Calculations Blog to see how the way this is now calculated may affect you)
To find out how you can best offset Buy to Let costs against your tax bill, contact Sage & Co Chartered Accountants on
