Claiming Tax Relief for Property Repairs – How Does It Work?
- TBA
- Apr 18
- 5 min read
Updated: Apr 22
We have previously shared a lot of information about property purchase, rental, and sale taxes in the UK, and we have received many enquiries from both UK-based and overseas landlords.
Some of our clients have asked:
Can repairs for a primary residence in the UK be claimed for tax relief?
How does it differ from rental properties in terms of tax treatment?
Does it depend on the type of materials used?
Today, we will address your questions regarding property repairs and renovations one by one.
Can Repairs for Primary Residences Be Claimed for Tax Relief?
In the UK, the cost of repairing a primary residence is generally not eligible for tax relief. This means that as a homeowner, you cannot deduct the cost of repairs from your taxable income.
However, if you make energy efficiency improvements to your property, such as installing insulation, upgrading to energy-efficient windows, or replacing your boiler, you may be eligible for tax relief or government subsidies.
Additionally, if your home is a listed building and you carry out repairs that meet conservation standards, you may be entitled to relief.
What Energy Efficiency Improvements Qualify for Tax Relief?
Compared to listed building repairs, energy efficiency improvements are more likely to qualify for relief.
To encourage homeowners to improve their properties’ energy efficiency, reduce energy consumption, and lower carbon emissions, the UK government has introduced several tax relief and subsidy schemes, including:
Green Home Grants
This scheme offered homeowners grants of up to £10,000 to improve the energy efficiency of their homes. Eligible improvements included wall, floor, and roof insulation, as well as installing double or triple glazing.
This scheme closed to new applications on 16 May 2023.
Great British Insulation Scheme
The Great British Insulation Scheme aims to improve the energy efficiency of hundreds of thousands of homes by providing insulation measures. If your application is approved, you may receive free or discounted insulation materials to help reduce energy costs.
Key features:
Available to homeowners in England, Scotland, and Wales.
Primarily targets homes with an Energy Performance Certificate (EPC) rating of D or below.
Provides full grants depending on the property’s energy performance and income level.
This scheme is backed by a £1 billion budget and is set to end on 31 March 2026.
Energy Company Obligation (ECO)
The ECO scheme requires large energy suppliers to fund energy efficiency improvements for low-income and vulnerable households. Through this scheme, homeowners may receive free or low-cost insulation and low-carbon heating systems, such as replacing or repairing boilers or upgrading heating systems.
The details of the ECO scheme may change depending on government policy and will require confirmation of your property’s energy efficiency rating.
What Other Support is Available?
The government also offers other forms of support, such as low-interest loans and financial incentives, to help homeowners cover the cost of energy efficiency improvements.
The UK National Wealth Fund has pledged to guarantee £250 million in loans to improve the energy efficiency of hundreds of thousands of homes.
The aim is to attract bond investors to help the government meet its climate targets. Housing associations will use these loans to fund small-scale renewable energy projects, low-carbon heating systems, insulation, and water-saving initiatives.
How Can Landlords Claim Tax Relief for Rental Property Repairs?
Unlike primary residences, the cost of repairs related to rental properties can be deducted when calculating taxable rental income. Below is a detailed guide on how to claim tax relief for such expenses:
Deductible Repair Costs
The following costs must be directly related to the rental business and should be supported by relevant documentation such as invoices and receipts:
Property maintenance and repair costs: This includes routine maintenance and repairs to the structure, fixtures, and equipment, such as fixing a leaking tap, repairing wall cracks, or replacing damaged flooring. However, it does not include upgrades or improvements.
Utility bills: Such as water, electricity, and gas, if paid by the landlord.
Appliance and furniture repairs: For example, repairing or replacing damaged household appliances or furniture.
Insurance costs: Including building insurance, landlord liability insurance, contents insurance, and public liability insurance.
Service charges: Payments to gardeners, cleaners, etc.
Agent and management fees: Payments made to letting agents or property management companies.
Professional fees: Costs incurred for services provided by accountants, solicitors, etc.
Ground rent and service charges: If applicable.
Telephone, stationery, and advertising costs related to the rental business.
Travel and mileage costs related to the rental business.
Important: These expenses must be aimed at maintaining the property’s current state, rather than enhancing or upgrading it.
Non-Deductible Costs
The following expenses are not eligible for deduction:
Capital expenditure: Such as purchasing property, extensions, or improvements that increase the property’s value.
Personal expenses: Costs related to personal use.
Full mortgage repayments: Since 2020, landlords can no longer deduct mortgage interest from rental income but can instead claim a 20% tax credit.
Does It Matter If You Use Standard or Eco-Friendly Materials?
UK tax regulations do not explicitly require landlords to use eco-friendly materials to claim deductions for repair costs.
As long as the expense is classified as a repair and not an improvement, the cost can be deducted regardless of the materials used.
Filling Out Your Tax Return
Landlords must report their rental income to HM Revenue & Customs (HMRC) through Self Assessment.
When completing the Self Assessment Tax Return (SA100), you must also complete the supplementary form SA105 (Property).
Key Steps:
Register for Self Assessment:
If this is your first time filing a Self Assessment tax return, you need to register with HMRC. After registering, you will receive a Unique Taxpayer Reference (UTR). Registration must be completed within 6 months of the end of the relevant tax year.
Submit Your Return:
You can choose to submit your Self Assessment tax return online or by post. The online submission deadline is 31 January each year, while the paper submission deadline is 31 October.
Report Rental Income:
Enter the total rental income received in the appropriate section of the form.
List Deductible Expenses:
Provide details of all deductible repair and management costs, such as repair expenses, insurance fees, and management fees.
Calculate Net Rental Income:
Deduct allowable expenses from the total rental income to calculate the net rental income, which will be included in your overall taxable income.
Record Keeping:
Landlords are required to keep relevant records for at least 5 years in case of inspection by HMRC.
Some Advice from TB Accountants
In summary, it is essential to distinguish whether your property is a primary residence or a rental property.
For rental properties, there are numerous tax relief options available, but you must maintain complete records and invoices.
If you are still unsure about which expenses qualify for relief or how to complete your Self Assessment tax return, you can turn to us.
Our professional accounting and tax team will provide one-on-one consultation, assist you in organising your rental income and expenses, reduce tax risks, and tailor a tax optimisation plan for you.
