When a rental property requires maintenance or repair, the costs count as expenses, likewise the price of lettings agent fees are considered costs for the use of the rental business and therefore it is unnecessary to pay tax on them.
It is important to remember that for any expenses or allowances that you wish to claim regarding your rental property, you will need to save all relevant paperwork in order to back up your claim. For example, if you have been required to replace any white goods within your property due to breakage, it is vital that you keep the receipts from the purchase in order for you to claim back any overpaid tax on this purchase.
Below is a rough guide on what can be considered for a tax deduction:
• Council tax while the property is empty • Gardening • Cleaning • Advertising costs for new tenants • Maintenance and repair expenses • Ground rent • Window repairs • Mortgage Interest charges • Services such as gas, water or electricity for the property which you provide
However, while these are recognised as necessary expenses, it is crucial to understand what classifies as an expense, while maintenance and repairs qualify as a non-taxable expense, improving the property significantly is not considered to be an expense. What is classified as maintenance and repairs is usually typical wear and tear which could account for 10% of your taxable rental income.
Weconsider ourselves experts in lettings, if you’d like to get in touch with our team to find out more about the benefits of being a landlord and whether you might be paying too much tax on your rental property income, please contact our lettings director Mark Yelverton on 020 7467 5770.