Landlord Tax Tips: What You Need to Know
Thu 13 Mar 2025
As a landlord in Surrey, understanding your tax obligations is crucial for managing your rental income efficiently and staying compliant with HMRC regulations. Many landlords overlook tax reliefs available to them, but knowing what you can and can't claim can help reduce your tax bill and improve profitability.
Below, I’ve outlined key tax-saving tips to help you stay on top of your obligations and maximise your returns.
✅ Letting agent fees – The cost of professional property management services
✅ Accountant’s fees – If you use an accountant to manage your rental accounts
✅ Maintenance and repairs – Fixing broken fixtures (but not improvements, like installing a new kitchen!)
✅ Ground rent & service charges – If your property is leasehold
✅ Landlord insurance – Covering the building and contents in a rental property
✅ Appliance cover – Policies like British Gas HomeCare for boiler repairs
✅ Gardeners & cleaners – If they provide services for your rental property
✅ Inventory & compliance checks – Professional inventory services and legally required safety checks, including:
✅ Legal fees – For tenancy agreements of under a year or lease renewals under 50 years
✅ Advertising & admin costs – Expenses for finding new tenants, including online ads and phone calls
Keeping track of these expenses throughout the year can help reduce your tax bill significantly!
What does this mean?
If you let out only part of your home or rent your property for part of the year, expenses must be proportionally allocated.
For non-resident landlords, expert tax advice is highly recommended to avoid unexpected costs.
Get in touch today to see how we can help manage your rental property efficiently! ☎️ 01483 284141
Below, I’ve outlined key tax-saving tips to help you stay on top of your obligations and maximise your returns.
Did You Know? These Expenses Are Deductible!
When calculating your rental profit, you can deduct certain expenses from your rental income before tax. These include:✅ Letting agent fees – The cost of professional property management services
✅ Accountant’s fees – If you use an accountant to manage your rental accounts
✅ Maintenance and repairs – Fixing broken fixtures (but not improvements, like installing a new kitchen!)
✅ Ground rent & service charges – If your property is leasehold
✅ Landlord insurance – Covering the building and contents in a rental property
✅ Appliance cover – Policies like British Gas HomeCare for boiler repairs
✅ Gardeners & cleaners – If they provide services for your rental property
✅ Inventory & compliance checks – Professional inventory services and legally required safety checks, including:
- Gas Safety Inspection (GSI)
- Electrical Installation Condition Report (EICR)
- Energy Performance Certificate (EPC)
✅ Legal fees – For tenancy agreements of under a year or lease renewals under 50 years
✅ Advertising & admin costs – Expenses for finding new tenants, including online ads and phone calls
Keeping track of these expenses throughout the year can help reduce your tax bill significantly!
Mortgage Interest: What’s Changed?
In recent years, HMRC changed the way landlords can claim mortgage interest. Previously, you could deduct mortgage interest from rental income, but now you receive a 20% tax credit instead.What does this mean?
- Basic-rate taxpayers (20%) won’t see much change.
- Higher-rate taxpayers (40%)
- Additional-rate taxpayers (45%) may end up paying more tax on rental income.
If you let out only part of your home or rent your property for part of the year, expenses must be proportionally allocated.
Non-Resident Landlords: What You Need to Know
If you live outside the UK for more than six months a year, you’ll be classed as a non-resident landlord under the HMRC Non-Resident Landlord Scheme (NRLS). This means:- Letting agents must deduct basic rate tax (20%) before paying rental income to overseas landlords—unless you apply to receive rent gross using an NRL1 form.
- You still need to file a UK Self-Assessment tax return to declare rental income.
- If your country has a Double Taxation Agreement (DTA) with the UK, you might be able to offset some of your UK tax bill.
- Capital Gains Tax (CGT) applies if you sell your UK property—you must report and pay any CGT within 60 days of the sale.
For non-resident landlords, expert tax advice is highly recommended to avoid unexpected costs.
Should You Seek Professional Advice?
Tax laws change frequently, and staying compliant while optimising your rental income can be challenging. If you're unsure about your tax position, speaking to a professional accountant or tax adviser is always a good idea. At Wills & Smerdon, we work closely with landlords across Surrey, offering expert property management services to help you maximise your rental returns and stay compliant with regulations.Get in touch today to see how we can help manage your rental property efficiently! ☎️ 01483 284141