Rent, rates, insurance and ground rents (property)
for landlords

On the UK property pages, box 24 covers rent, rates, insurance and ground rents: the running costs of holding a let property. It includes landlord insurance, ground rent and service charges on leasehold flats, Council Tax and utilities the landlord pays, and rent if you are sub-letting. For most landlords it is the second-largest expense category after finance costs.

What goes in this category

• Landlord buildings, contents and public liability insurance.
• Ground rent and service charges on a leasehold property you let.
• Council Tax, water rates, gas and electricity the landlord pays, such as in void periods or all-inclusive lets.
• Rent you pay on a property you sub-let.

What does not

• Mortgage interest on residential lets, which gives a 20% tax reduction instead (box 44).
• Utilities and Council Tax the tenant pays directly.
• Stamp Duty and other costs of buying the property.
• Improvements to the property, which are capital.

Items in this category

Void periods

Between tenancies, the landlord usually becomes liable for Council Tax, and pays the utilities while the property is empty and being prepared. Those costs are allowable, as long as the property is still being let or made available to let. A property taken off the market for personal use is a different matter: costs during that time are personal.

HMOs and all-inclusive lets

In a house in multiple occupation, and in lets where the rent includes bills, the landlord pays Council Tax and utilities. The rent is income, and those bills are allowable expenses in this box. Keep the bills and the tenancy agreements that show what the rent includes.

Leasehold flats

Leaseholders pay ground rent and service charges to the freeholder or managing agent. For a let leasehold flat, both are allowable in this box. Service charge demands for major works need a closer look: repairs are allowable, improvements are capital.

Rent a Room and the property allowance

If you let a furnished room in your own home, the Rent a Room Scheme makes up to £7,500 of gross receipts tax-free, or £3,750 if the income is shared, and you do not deduct expenses. Otherwise, landlords can deduct actual expenses or take the £1,000 property allowance, whichever gives the lower profit.

Costs before the first let

Costs incurred before you first let a property, such as insurance, Council Tax and utilities while you prepare it, can be treated as incurred on the day the letting business starts, as long as they are costs you could have claimed once letting had begun and were incurred within seven years before it. Improvements made to get the property ready, such as a new kitchen that goes beyond a like-for-like replacement, stay capital. A property you already let is part of an existing letting business, so costs of preparing a second property for letting are usually part of that business, not a new one. Record the date each property first became available to let, and keep the pre-letting bills with that property's records.

Keeping the categories straight

Repairs go in box 25, not here, and letting agent and legal fees go in box 27. Keeping costs in the right boxes does not change the tax, but it makes your figures easier to check and to carry into Making Tax Digital quarterly updates.

Insurance claims

If an insurer pays for damage to a let property, deduct only the repair costs the pay-out did not cover. The same applies to damage covered by a tenancy deposit you keep: claim only the costs above the deposit retained. The premium itself stays in this box.

Worked example: a landlord with one leasehold flat

A landlord lets a leasehold flat. In the year she pays £420 of landlord insurance, £250 of ground rent and £1,800 of service charges, and £380 of Council Tax and utilities during a six-week void. Her box 24 total is £2,850. Her mortgage interest goes in box 44 for the 20% tax reduction, not here.

Four questions before a cost goes here

1. Was it for the letting, and only for it? A cost must be incurred wholly and exclusively for the property business. A cost with a personal purpose that cannot be separated is not allowable at all.
2. Is part of it personal? Where a business part can be identified, such as business miles or business calls, claim that part on a reasonable basis and leave the rest out.
3. Is it a running cost or something you keep? Running costs belong in the expense categories. Buying or improving the property is capital and never goes here, though replacing domestic items has its own relief.
4. Is there a specific rule? Some costs are disallowed whatever their purpose, such as fines and client entertaining, and some have their own treatment, such as residential finance costs, which give a 20% tax reduction instead of a deduction.

Jointly owned property

If you own a let property with someone else, each owner reports their share of the rental income and expenses. Married couples and civil partners who live together are usually taxed on equal shares; if you own the property in unequal shares and are entitled to the income in the same shares, you can be taxed on that basis once you declare your beneficial interests to HMRC. Owners who are not married or in a civil partnership usually split profits by their share of the property, unless they agree a different allocation.

Property allowance or expenses

Instead of deducting expenses, a landlord can claim the £1,000 property allowance, which is simply taken off rental income. You cannot claim both for the same income, so the allowance only helps if your allowable expenses are less than £1,000. If your gross property income is £1,000 or less, the allowance covers it and you may not need to report it. Either way, keep records of what you spent, so you can tell which gives the lower profit.

This category in Making Tax Digital

Under Making Tax Digital for Income Tax, a landlord's quarterly update carries the same property expense categories as the UK property pages of the return, so this category is one line of each update. Landlords with property income only, or with property and trading income together over £50,000, join from 6 April 2026, falling to £30,000 from April 2027 and £20,000 from April 2028. If your property income is under £90,000 you can send a single consolidated expenses figure instead of the categories, but you still need the underlying records.

Cash basis or traditional accounting

Which accounting basis you use changes when a cost in this category counts, and sometimes whether it counts as an expense. On the cash basis, now the default, you deduct costs when you pay them and most things you buy to keep are ordinary expenses (cars being the exception). On traditional accounting, you deduct costs when you incur them and claim capital allowances for things you keep.

Residential finance costs are different

Since 6 April 2020, mortgage interest and other finance costs on residential lets are not deducted from rental income at all. Instead, you get a tax reduction of 20% of those costs, which is worth the same as a deduction to a basic-rate taxpayer and less to a higher-rate one. Finance costs for commercial and other non-residential lets are still deducted in full. That is why the property pages have a separate box (44) for residential finance costs.

How much an allowable cost saves

Landlords pay Income Tax on rental profit but no Class 4 National Insurance, so each pound of allowable expense saves 20p at the basic rate, 40p at the higher rate and 45p at the additional rate. Residential finance costs are the exception: they give a flat 20% tax reduction instead of a deduction.

What £1,000 of allowable expense saves a sole trader in 2026/27

• Basic rate (20% + 6%)£260
• Higher rate (40% + 2%)£420
• Additional rate (45% + 2%)£470
• Allowance taper band (60% + 2%)£620

Records to keep

Keep the invoice or receipt for every cost in this category, with a note of the business purpose wherever it is not obvious, and how you worked out the business share of anything also used privately. From 6 April 2026, sole traders and landlords with qualifying income over £50,000 keep digital records and send quarterly updates under Making Tax Digital, falling to £30,000 from April 2027 and £20,000 from April 2028.

Common mistakes

• Putting residential mortgage interest here instead of box 44.
• Claiming bills the tenant paid directly.
• Claiming costs while the property was used personally.

Every other category

The other 7 categories on the UK property pages, in box order:

• Property repairs and maintenance, SA105 box 25
• Non-residential property finance costs, SA105 box 26
• Legal, management and other professional fees (property), SA105 box 27
• Costs of services provided, including wages (property), SA105 box 28
• Other allowable property expenses, SA105 box 29
• Travel costs (property), SA105 box 29
• Residential property finance costs, SA105 box 44

The A to Z of expenses lists every item and all 23 categories: the 15 self-employment categories and the 8 for UK property.