With 2.7 million people living in rented accommodation, it’s not surprising that landlords are choosing to rent out properties as a great way to make money. These small business landlords can earn a solid rental income from tenants renting out properties.
However, while the money you can earn is significant, you will have to pay your tax annually and consider this amount in the profit you can make from the properties. For those small businesses, they need to ensure they are aware of the tax regulations and this includes income and expenses.
A lot of these small business property owners don’t consider their tax reductions and how these can reduce the amount of tax owing when you submit your tax return. This can help them to earn more while staying within the law, paying their tax on their small business.
Here are four tax deduction secrets small business landlords use in 2026.
1. Cleaning and Maintenance
Repairs are allowed to be deducted from tax as long as they are made to maintain the property. For example, fixing a leak or replacing a broken window is necessary to keep the tenant safe and functional. These costs which help to maintain the property are allowed to be deducted from the income.
What does not count are fixes to the property that are there to improve the property rather than a simple fix or repair. For example, changing the flooring completely or replacing the kitchen is a capital improvement rather than a repair.
Cleaning and gardening costs of the rental property are also deductible if they are there to keep the property in good shape. This might include cleaning at the end of a tenancy or lawn care after winter.
A lot of landlords forget about cleaning and maintenance when they are looking at deductions. But keeping the property maintained and repaired is essential, and is a must when working out tax deductions.
2. Safety checks
It’s very important to keep your tenants safe as a landlord and safety checks are part of ensuring the property remains in a good condition. Keeping the tenant safe with key safety checks is also a tax deduction that landlords forget about when arranging their expenses.
HMRC recognises the importance of gas safety certificates and electrical safety reports and these can be deducted from taxes.
Replacing items such as carbon monoxide alarms and fire alarms are also deducible as these will keep the property and tenants safe.
As it says on e-accounts, HMRC sees this as necessary for letting out a property legally and safely.
3. Property management fees
A lot of landlords work with a property management company who help them with their small rental business. They can help with collecting the rent and inspecting the property, helping the landlord to focus on other tasks. This can be particularly helpful for landlords who are dealing with multiple properties at one time.
The property manager can ensure you have a solid, reliable tenant and help them as necessary. This comes at a cost to the landlord and these can be deducted as business expenses when its time to do the taxes.
The same applies if you decide to let out your property through a letting agent. This is often a popular way to rent out a property as they can help check out tenants and will do credit checks to ensure you have a reliable monthly payment. This is often time-saving and helps if the small business owner has multiple properties.
They take a fee out of the annual or monthly rent, and this amount will then be classed as a deduction when it’s time to pay out the taxes.
4. Insurance
You need to make sure you have insurance as a landlord when you have a rental property. Buildings insurance is necessary to help you protect the property and if any issues do occur, you can make a claim. It’s a requirement when you own a property, as well as contents cover. This is important as a landlord as it covers the items that are inside in your property.
If anything got broken such as an appliance that needed replacing, you can claim on the contents to ensure safe and working appliances are available to tenants. Both building and contents insurance can be claimed for when it comes to taxes.
Landlord insurance is also a necessity when you own a rental property. This can help protect you as a landlord if there was damage to the property as well as if there was any legal expenses. Remember the policy has to be for the rental business, not personal home insurance.
Remember that you need to keep digital records for when it is time to submit your tax return. Keeping accurate financial records is important with this documentation vital for when you are working out profit and deductions. You can work with accountants in London who can help you to work out your expenses and make sure that you include all possible deductions when working out income and expenses.
