SA105 property expenses: what landlords can and cannot claim
Note: This article covers the general principles of property income expenses for individual landlords in England. Tax rules change. Always consult a qualified accountant or tax adviser for advice specific to your circumstances.
What the SA105 is
If you receive income from renting out a UK property, you complete the SA105 supplementary pages as part of your Self Assessment tax return. The SA105 covers UK property income — rents received, allowable expenses and the resulting profit or loss.
HMRC publishes detailed notes for the SA105 at GOV.UK. These notes are updated each tax year and are the authoritative reference for what you can and cannot claim.
The eight allowable expense categories
1. Rent, rates, insurance and ground rents
Premiums paid for landlord insurance (buildings, contents, liability) are allowable. Council tax paid while the property is empty between tenancies is allowable. Ground rent on a leasehold property is allowable.
2. Property repairs and maintenance
This is the most important and most commonly misunderstood category. You can claim for repairs and maintenance that restore the property to its original condition — a like-for-like replacement. You cannot claim for improvements that make the property better than it was before.
Examples of allowable repairs: fixing a broken boiler, replacing broken windows, repairing a damaged roof, redecorating between tenancies, fixing plumbing leaks.
Examples of non-allowable improvements: fitting a new kitchen where the old one was functional, converting a loft, installing central heating where there was none before. These are capital expenditure, not revenue expenditure.
The repair vs improvement line is important. A replacement like-for-like is a repair. An upgrade is an improvement. If you replace a standard kitchen with a premium fitted kitchen, the element of improvement may be disallowable. HMRC can challenge this on inspection.
3. Loan interest and finance costs
Since 2020, individual landlords can no longer deduct mortgage interest directly from their rental income. Instead, you receive a 20% tax credit on finance costs. This is the Section 24 restriction introduced by the Finance (No.2) Act 2015.
If you are a higher-rate (40%) taxpayer, this change significantly increases your effective tax rate on rental income. A landlord paying 40% tax who previously deducted £10,000 of mortgage interest now receives only a £2,000 credit instead of a £4,000 deduction — a £2,000 increase in tax. Limited companies are not subject to Section 24.
4. Legal, management and professional fees
Allowable: letting agent fees, accountancy fees for preparing property accounts, legal fees for renewing a lease (where the lease is for less than 50 years), legal fees for pursuing rent arrears, eviction costs.
Not allowable: legal fees for buying or selling a property (these are capital costs), fees for extending a lease for more than 50 years.
5. Costs of services provided
If you pay for services provided to tenants — such as gardening, cleaning of communal areas, or buildings management — these costs are allowable.
6. Other expenses
This covers miscellaneous costs that are wholly and exclusively incurred for the purpose of the rental business. Examples include: stationery, postage, advertising for tenants, mileage to the property for legitimate management purposes.
7. Property income allowance (optional)
As an alternative to claiming actual expenses, individuals with gross rental income under £1,000 per year can claim the Property Income Allowance instead. If your gross rental income exceeds £1,000 you cannot claim this allowance but you can still deduct actual allowable expenses.
8. Pre-letting expenses
Expenses incurred before a tenancy starts can be allowable if they are incurred wholly and exclusively for the rental business and within a reasonable time of the first letting. This could include decorating costs, safety certificate costs and advertising costs before the first tenant moved in.
Replacement of domestic items relief
You cannot claim capital allowances on furniture and equipment in residential lettings. Instead, you can claim the Replacement of Domestic Items Relief when you replace an item. You can claim the cost of the replacement (but not the original purchase), capped at the cost of an equivalent standard replacement. If you replace a basic washing machine with a premium model, you can only claim the cost of the basic equivalent. Source: HMRC Property Income Manual PIM3210.