Is it a repair or an improvement for landlord tax?
By the VoxaMTD team. Last verified 31 October 2026
A repair restores an asset to its original condition, sometimes by replacing parts, and is deductible against rental income. An improvement, such as an extension, is a capital cost and is not.
Replacing an item like a bath or toilet with a like-for-like one is generally treated as a repair. Adding something new that improves the property beyond its original state is capital.
The expense must also be wholly and exclusively for renting out the property. GOV.UK says allowable expenses do not include capital expenditure, such as buying or renovating a property beyond repairs.
Keep invoices that describe the work clearly. If a job mixes both kinds, ask the contractor to split repair work from improvement work on the invoice, so you can claim the repair part with confidence and treat the rest as capital. Simple records now save arguments later.
Read next
- What is Capital vs revenue expenditure? →
- Allowable Expenses for Landlords (2026) →
- Transaction categorisation →
Sources
- GOV.UK: Income Tax when you rent out a property: working out your rental income
- GOV.UK: Renting out a property: paying tax