Last updated: 14 October 2026
Can you offset rent you pay against your rental income?
Only if the rent is a cost of your letting business. If you rent a property and sublet it, the rent you pay the head landlord is an allowable expense against the rent you receive. But if you let out your own home and rent somewhere else to live, the rent on your new home is a personal cost and can’t be deducted. The same applies to council tax and bills on your own home.
When rent you pay is deductible
| Situation | Deductible against rental income? |
| Rent-to-rent: you lease a property and sublet it | Yes |
| Ground rent and service charges on a let flat | Yes |
| Rent for storage used only for letting furniture or tools | Yes |
| Rent on your own home after letting your old home | No |
| Rent on a holiday home you also use | Only for the let periods, proportionately |
| Office rent for a large property business | Yes, the business share |
Example
Ben moves to Bristol for work and lets his Leeds house for £1,100 a month. He rents a flat in Bristol for £1,300 a month. He can’t deduct the Bristol rent, because it’s where he lives. His Leeds profit, after letting fees, insurance and repairs, is taxable in full. His friend Neha leases a house for £1,500 a month and sublets 4 rooms for £2,400 a month in total. Her £1,500 rent is a business expense, so her profit before other costs is £900 a month.
Rent-to-rent and the rules
If you sublet as a business, check that the head lease allows it. You may need a licence for a house in multiple occupation (HMO). Your profits are property income, taxed in the same way as other rental profits. From 6 April 2027, property income is taxed at 22%, 42% and 47%.
Letting your own home and Rent a Room
If you let a furnished room in a home you rent and live in, you can use Rent a Room relief: the first £7,500 a year is tax-free. Rent a Room works whether you own or rent the home, as long as it’s your main residence.
Other costs you can and can’t claim
- Can: letting agent fees, repairs, insurance, accountancy fees, replacing furnishings
- Can’t: mortgage capital repayments, improvements, your own living costs
- Finance costs: mortgage interest gives a 20% tax credit, not a deduction
Moving out and Capital Gains Tax
If you let your former home, you keep private residence relief for the years you lived there and the final 9 months, but the letting years may be taxable when you sell.
Records to keep
Keep the head lease, your tenancy agreements and a monthly record of rent paid and received.
Frequently asked questions
Can I claim the rent on my home office?
Not against rental income, unless it’s used for the letting business.
Can I deduct rent paid to a family member?
Only if it’s for the letting business and at a commercial rate.
Does the property allowance apply to rent-to-rent?
Yes, but you can’t claim it and your actual costs together.
Do I need my landlord’s permission to sublet?
Usually, under the lease.
Related: what landlords can claim, Rent a Room relief and when rental profits aren’t taxed.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with allowable landlord costs. 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 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
