Last updated: 16 October 2026
Can landlords claim depreciation on a property?
No. Depreciation shown in your accounts isn’t allowable for tax, and buildings themselves don’t qualify for capital allowances for residential landlords. Instead, landlords of residential lets can claim replacement of domestic items relief when they replace furnishings, appliances and kitchenware, and can deduct repairs that restore the property to its original condition. Commercial property landlords can claim capital allowances on plant and machinery, such as heating and lifts, and the structures and buildings allowance (3% a year) on new construction costs.
Residential versus commercial property
| Item | Residential let | Commercial let |
| Depreciation | Not allowable | Not allowable |
| Building cost | No relief (CGT base cost) | Structures and buildings allowance 3% |
| Fixtures (heating, lighting) | No capital allowances in a dwelling | Capital allowances |
| Replacing furniture | Replacement of domestic items relief | Capital allowances |
| Repairs | Deductible | Deductible |
Replacement of domestic items relief
You can deduct the cost of replacing a domestic item, such as a sofa, fridge or carpets, with a like-for-like item. You can’t claim for the first purchase, and if you upgrade, only the cost of an equivalent item is allowed.
Repairs versus improvements
- Repairs: fixing a roof, replacing broken windows with modern equivalents, repainting: deductible
- Improvements: adding an extension or loft conversion: not deductible against rent, but added to the cost for CGT
Companies owning property
A company that owns property also can’t deduct depreciation. It adds back depreciation in its corporation tax computation and claims capital allowances where available.
Example
Lisa lets a furnished flat. She bought it for £250,000 and in 2026/27 depreciates the furniture by £800 in her accounts. She can’t claim the £800. She replaces a broken washing machine for £450, which she can claim under the replacement relief, and repaints the flat for £1,200, which is a repair.
Furnished holiday lets
The special furnished holiday let regime ended in April 2025, so former FHL owners can no longer claim new capital allowances on furniture; they now use replacement of domestic items relief.
Common mistakes
- Deducting depreciation from rental profit
- Claiming the first purchase of furniture
- Treating improvements as repairs
- Ignoring capital allowances on commercial property
Records to keep
Keep invoices for repairs and replacements, with notes of what was replaced and why.
Common parts of flats
Landlords who own a block of flats can claim capital allowances on plant and machinery in the common parts, such as lifts, communal heating and hallway lighting, because these areas aren’t part of a dwelling. Keep separate records of spending on common areas so the claim can be supported. For more on fixtures, see repair costs as allowable expenses.
Frequently asked questions
Can I claim the cost of the property itself?
No, it is a capital cost, deducted from the sale price when working out CGT.
Can I claim for a new kitchen?
Yes, if it’s like-for-like replacement of a worn kitchen.
Is a new boiler deductible?
Yes, as a repair if it replaces an old one with a modern equivalent.
Can I claim the cost of furniture in an unfurnished let?
No, replacement relief applies only to items you provide.
Related: losses on let properties, capital or revenue expenses and outbuilding demolition costs.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with landlord expenses advice. See our landlord accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 16 October 2026. It is not personal advice, so speak to an accountant about your own situation.
