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Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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Landlord's and Tax - What items are tax deductible on

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Landlord's and Tax - What items are tax deductible on 2nd rental propertyI currently have one property I am renting out since last year and am about to start renting out a 2nd one from September 2016.When we prepared the first house a total of around £20,000 was spent to refurbish the place. As the work was done before the house was being rented I believe that this money would only be tax deductible on the capital gains in the event of a future sale (please correct me if I am wrong!).However, now we are preparing the second property and before we spend money, I would like to clarify if the situation is different and plan accordingly.I've been told that once the first property is up and running with tenants in it, then what can be claimed back is different than it is before having any tenants.Is this the case, and if so how does it work?For example, we plan furniture for the 3 bedrooms (e.g. new beds, wardrobes, drawers etc), and also a new fridge freezer and cooker. We also plan to decorate and replace flooring.Would any of this be deductible against the tax bill?Thanks


Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.

I am afraid no refurb costs are allowable against rents - these generally are a capital expenditure allowable against the gain at sale. Just repairs and maintenance with a tenant in situ is allowable against the rental income .

So the general decoration is not allowable but the new flooring can be claimed against the gain at sale.

As the property will be furnished - then 10% will be allowable as wear and tear against the furniture OR you can have the replacement value as and when an item needs replacing. But you cannot have the initial outlay on the purcahse costs - these are a cost to you.

I hope this assist in making the position clearer -



Customer: replied 2 years ago.
Hi SamThanks for the answer but I want to clarify one thing. Above it mentions that for furniture "10% will be allowable as wear and tear against the furniture OR you can have the replacement value as and when an item needs replacing".However, I was under the impression that as part of the "Reform of the wear and tear allowance", since April 2016 we could only claim the actual costs and not the 10%. Am I mistaken or is this maybe part of the transition to the new system?RegardsMartin


Thanks for your response

Yes that's the 10% wear and tear allowance which you can claim each tax year OR you claim the renewals basis which does not allow anything for the actual initial purcahse but allows any future replacement costs.

So its either/or



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Customer: replied 2 years ago.
Thanks for your help. Good to hear it's still possible to use the "10% wear and tear" as I had thought it was no longer possible.