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Increasing your income by renting out property is a great idea – just don’t forget to pay tax on that rental income.
What you might not know is that you can increase your after-tax profits by claiming property expenses.
Anything can be claimed as long as it relates directly to renting or maintaining the property:
Then the expenses must be apportioned accordingly.
For example, if it’s a two bedroom flat and you live in one while renting out the other one, then most expenses can be claimed up to 50%.
You might also be eligible for the £7,500 Rent a Room allowance.
Yes, mortgage interest can be claimed, but not mortgage repayments.
However, rules are changing, so read our guide to mortgage interest relief changes to understand how it works.
Until recently, landlords could claim up to 10% of the annual rent by using the flat “wear and tear allowance”. This has now been swapped with the replacement of domestic items relief.
Basically, you can claim anything spent on replacing things like:
Two things to remember: