Repairs versus improvements for tax
Repairs are deductible against rental income in the year they are incurred. Improvements are capital and only reduce the gain when you sell. Getting the line right is one of the most common landlord tax questions.
4 min read · Updated 2 August 2026
Overview
Repairs are deductible against rental income in the year they are incurred. Improvements are capital and only reduce the gain when you sell. Getting the line right is one of the most common landlord tax questions.
The like-for-like test
Replacing a worn item with the nearest modern equivalent is a repair. Upgrading to something materially better, or adding something that was not there, is an improvement.
Common examples
A new boiler replacing a broken one is usually a repair; adding central heating where there was none is capital. Repainting is a repair; a loft conversion is not.
Mixed jobs
Where a job contains both, apportion it and keep the invoice detailed enough to support the split.
Records
Keep every invoice with a description of the work. HMRC enquiries turn on the description, not the amount.
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This guide is general information for UK landlords and letting agents, not legal advice. Rules differ across England, Wales, Scotland and Northern Ireland — check your local requirements or take advice before acting.