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Corporate Services Blog

Changes to Tax Relief on Cost of Repairs on Rented Property


From April 2016 the rules have changed regarding tax relief on rental income against cost of repairs.  Previously a fixed amount of 10% allowance could be claimed, known as the wear and tear allowance, even where landlords had not undertaken any work.  However, now landlords will be able to only write off cost of repairs that they have actually done.
The announcement which came out in July of last year has been causing significant problems to tenants who were in need of urgent repairs where landlords were deferring repair work until the new rules came into effect in order to take advantage of this tax break.
This new relief applies to all rented residential properties whereas previously the allowance was only for fully furnished properties.  This relief does not include initially furnishing the property or holiday lets.  It is also restricted to necessary repairs and anything deemed to be an improvement of the property beyond its original condition will not apply, therefore it is important when making repairs to replace with like for like or nearest modern equivalent in order for this to be deemed as an allowable revenue expenditure.

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