What Allowable Expenses Can Landlords Claim? | Intro to Property Tax

What property expenses can you claim to reduce your tax bill? In this video, we look at the different types of allowable expenses landlords and property investors can claim against income from rental property.
Expenses can be offset against profits, reducing the amount of tax you’ll pay, either each year or when you come to sell a property. This is why it’s really important to record and claim all expenses from running your property business. Provestor CEO, James, covers the differences between Capital Expenses - which are claimed when you sell the property - and Revenue Expenses, claimed at the end of each tax year.
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[@rongchenjia]

can landloard claim all those taxes through PAYE online portal?

[@haroonkhan8690]

Can you also claim the mentioned expenses when operating as a sole trader?

[@provestor]

Hi Haroon, yes you can. 😊

[@Manjusg1]

Hi James, all your videos are very very helpful, thank you for creating. I am trying to refinance one of my buy to let properties to arrange a deposit to purchase a new buy to let property. To do this I have to pay Early repayment charge to my current lender to exit from the current mortgage. Can this ERC is allowable expenses under finance cost when doing my rental income? Thank you

[@provestor]

Thank you for your comment and kind words. 😊 We're glad you found our videos helpful! Thanks for your question. Our Head of Tax, Nadeem, advises the following: "The majority of break payments (early repayment charges) that take the form of a penalty for early redemption of the loan will represent genuine compensation to the lender. In such circumstances, the break payment will not amount to a premium (i.e .capital over and beyond what is owed) and will therefore attract relief as incidental costs of raising loan finance. "An early redemption charge should therefore be allowable as a finance expense against the rental income in the tax year that it arises. More information on this can be found in the HMRC manual BIM45820." Hope this helps! 🙂 If you need detailed property tax advice for your specific situation, you can book a consultation using the link below. www.provestor.co.uk/tour/tax-consultations

[@VLN-ho1pp]

those allowable expenses you mentioned, are applied to normal landlord who own a bel property in personal name? or just for ltd company. thanks

[@provestor]

Hi, thanks for your comment! The majority of these expenses can be claimed for personally and limited company owned properties. There are some exceptions, such as mortgage interest (not allowable if owned personally). Thanks!

[@user-io3kf8qb8p]

Hello, if I pay ground rent in advance of the whole year, and halfway through the year I start renting out my flat, can I claim half of the ground rent as an allowable expense? Thanks!

[@provestor]

Hi, Costs incurred "wholly and exclusively" for the purposes of the property rental business will be deducible for tax purposes. If the cost is made in advance of the property business starting it may still be deductible. This HMRC guide has more details: www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2505 Hope this helps!