Property expenses incurred wholly and exclusively for your property rental business are deductible. You would subtract the expenses from your rental income when calculating your profit from you property rental business.
Mortgage of your property
Generally, only the interest element of the mortgage of your property is deductible against your rental income.
Repairs and maintenance
You may claim all expenses incurred to make good of your property. This includes wages for the cleaners and gardeners.
However, you may not deduct costs to improve your property as repair and maintenance. For example, you replace sofa with a sofa bed.
Accountant’s fee
If you pay your accountant to upkeep your property rental company accounts. The accountancy fee is deductible.
Insurance
You may deduct your landlord’s policies for buildings, contents insurance and public liability insurance against your rental income.
Necessity
Council tax, gas, electricity and water rates are deductible if you are paying for it. However, if these expenses are paid by your tenants not you then you are not allowed to claim it.
Property letting fee
You may deduct the commission you paid to your estate agent. Similarly, for estate agent management fee if they manage the property for you.
Other costs
You may deduct the costs for phone calls, stationery and advertising for new tenants. If you show your property to your potential tenants yourself and you incurred fuel costs. You may deduct that expense too.
Legal fees
You may also deduct legal fees you paid to your solicitors relating to your property. For example, legal fee for renewing a lease for less than 50 years.
Subletting
If you are subletting, you may deduct the rent you paid to your landlord against the rental income you received. This include ground rents and service charges.
If you have any questions about your property rental expenses, feel free to get in touch with our accountants.
