Last updated: 14 October 2026
Are repair costs an allowable expense?
Yes. Repairs and maintenance that restore an asset to its previous condition are allowable expenses for landlords and businesses, and are deducted from income in the year you pay them. Improvements that make the asset better than it was, such as an extension or an upgrade, are capital costs. They aren’t deductible from income, but they may reduce capital gains tax when you sell, or qualify for capital allowances.
Repair or improvement?
| Work | Usually |
| Fixing a leaking roof | Repair |
| Replacing broken windows with modern double glazing | Repair, as the modern equivalent |
| Repainting and redecorating | Repair |
| Replacing a kitchen with a similar standard | Repair |
| Replacing a basic kitchen with a luxury kitchen | Improvement (part of it) |
| Adding an extension or loft conversion | Improvement |
| Rewiring to modern standards | Usually repair |
| Converting a garage into a room | Improvement |
The “like-for-like” principle
HMRC accepts a modern equivalent as a repair. Replacing single glazing with double glazing, or old boilers with efficient ones, is still a repair if it does the same job.
Repairs when you buy a property
Repairs to a property just after you buy it are allowable if the property was usable when you bought it and the price wasn’t reduced because of its condition. If the property was uninhabitable, the costs are capital.
Examples
- A landlord spends £4,500 replacing a broken boiler with a new combination boiler: allowable
- A landlord spends £35,000 on a rear extension: capital, added to the property’s base cost for CGT
- A shop owner replaces worn flooring with the same type: allowable
How to record repairs
- Keep invoices and photos before and after
- Describe the work on the invoice, for example “replace damaged roof tiles”
- Split mixed invoices into repair and improvement parts
Businesses and limited companies
The same principle applies to trading businesses. Capital items such as equipment may qualify for the Annual Investment Allowance. Buildings themselves don’t, but the Structures and Buildings Allowance gives 3% a year on qualifying commercial construction costs.
Mistakes with repairs and improvements
Landlords often claim the full cost of an upgrade, such as replacing a basic kitchen with a much more expensive one, as a repair. Only the cost of a like-for-like replacement is a repair: the extra is an improvement and is only deductible against CGT. Keep quotes and photos showing the condition before and after the work.
A further example
A landlord replaces single-glazed windows with standard double glazing for £5,000. HMRC accepts this as a repair, because double glazing is the modern equivalent. Repairs to a property in a poor state when bought may be capital.
Frequently asked questions
Can I claim repairs to my own home?
Not unless part of it is used for the business, and then only the business share.
Is a new roof a repair?
Usually yes, if it replaces the old one with similar materials.
Can I claim the cost of my own labour?
No. Only the cost of materials and paid labour.
Do repairs before letting count?
Yes, if the property was in a lettable state when you bought it.
Related: what expenses can I claim as a landlord and what expenses can I claim for business.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with repairs vs improvements. 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.
