Property investors have fewer reliefs than they think, and the one most often assumed — rollover relief — is not available for let property at all. What is available: replacement of domestic items, the 20% finance cost reducer, rent-a-room at £7,500, the property allowance at £1,000, capital allowances on commercial property, land remediation relief, and business property relief now capped at £2.5 million.
Replacement of domestic items relief
This replaced the old wear and tear allowance from April 2016. It gives a deduction for replacing a domestic item — furniture, furnishings, household appliances, kitchenware — in a let dwelling.
Four conditions, and the one that catches people is that the old item must no longer be available for use by the tenant. Moving the old sofa into another let property does not work.
Two further limits. Where the new item is not the same or substantially the same, the deduction is capped at the cost of a like-for-like replacement — so upgrading from a basic to a premium appliance gives relief only to the basic cost. And fixtures are excluded: plant or machinery installed as part of the dwelling, including boilers, radiators, baths, toilets, washbasins and built-in furniture.
There is no relief for the initial cost of furnishing a property — only for replacement. The relief is also unavailable where rent-a-room relief applies, or where the dwelling was wholly or partly a furnished holiday letting.
The finance cost restriction
For individual landlords, relief on residential property finance costs — mortgage and loan interest, alternative finance returns, and the incidental costs of obtaining or repaying finance — has been restricted to the basic rate since 6 April 2020, after a three-year phase-in.
The mechanism is a 20% tax reducer, not a deduction, applied to the lowest of three figures: the unrelieved finance costs plus any brought-forward amount; the property business profits; or adjusted total income exceeding the personal allowance. Any excess of the relievable amount over the amount actually relieved becomes a brought-forward amount for the following year, so it is not lost.
The restriction does not apply to companies, or to loans wholly for commercial properties. That asymmetry is the single biggest driver of incorporation decisions among leveraged landlords — though the SDLT and capital gains consequences of acting on it usually dominate the arithmetic.
One forward-looking note: the reducer is 20% for 2026/27, but the legislation has been amended to substitute a "property basic rate" from 2027/28 onwards, so it should not be described as permanently 20%.
Rent-a-room and the property allowance
Rent-a-room relief is £7,500, halved to £3,750 where someone else also receives rents from the same residence. It works on a gross receipts basis, applies only to furnished residential accommodation in the taxpayer's only or main residence, is not available for rooms let for business purposes, and is for individuals only.
The property allowance is £1,000 a year, separate from the £1,000 trading allowance. Where gross property income is £1,000 or less there is full relief and nothing to tell HMRC or declare. Above that, you can elect to deduct £1,000 instead of actual expenses — which suits a property with minimal costs and not one with a mortgage.
It is unavailable where income comes from a company you or a connected person controls, from a partnership you or a connected party is in, or from your or your spouse's employer. It also cannot be combined with rent-a-room relief or with the residential finance cost reducer, and cannot be used if you want to claim a loss.
Rollover relief does not apply to letting
This deserves its own heading because the assumption is so common. HMRC's position is unambiguous: rollover relief is available to persons carrying on a trade who use the assets for that trade, and "roll-over relief is not available for let property or other investments".
The statutory requirement is that assets be "used, and used only, for the purposes of the trade throughout the period of ownership", and for land and buildings the qualifying class requires them to be occupied as well as used only for trade purposes. A landlord occupies nothing.
For genuine trading businesses the relief works on a reinvestment window of 12 months before to three years after the disposal, with the business trading at both points.
Note also that furnished holiday lettings lost their deemed-trade access to rollover — along with business asset disposal relief and gift relief — when the FHL regime was abolished from April 2025.
Capital allowances on commercial property
Two rates and one exclusion.
Integral features go to the special rate pool at 6%: electrical and lighting systems, cold water systems, space or water heating, powered ventilation, air cooling and purification, floors or ceilings comprised in such systems, lifts, escalators and moving walkways, and external solar shading.
The main pool rate is 14% from April 2026, down from 18%. Any advice still quoting 18% as current is out of date.
The structures and buildings allowance gives 3% a year straight line over 33⅓ years, where construction began on or after 29 October 2018. It excludes any residence and structures in the grounds of a residence, land, integral features, planning permission, financing and legal costs, and landscaping.
The annual investment allowance is £1 million. And the critical exclusion for residential landlords: for a UK property business, expenditure is not qualifying if incurred in providing plant or machinery for use in a dwelling-house, with a just and reasonable apportionment for mixed use.
Land remediation relief
Often missed on contaminated or derelict sites. It gives a deduction of 100% plus an additional 50% for qualifying expenditure, and for loss-making companies a payable credit of 16% of the surrendered qualifying land remediation loss.
Two limits. It is a corporation tax relief only — individuals cannot claim, though a corporate partner may elect for its share. And the capital election must be made within two years of the period end, with the additional 50% claimable within six years.
Inheritance tax: £2.5 million
For deaths on or after 6 April 2026, 100% agricultural and business relief is capped at £2.5 million of combined qualifying property, with any excess relieved at 50%. The allowance is transferable between spouses and civil partners, taking the potential combined figure to £5 million.
Two warnings. First, the allowance was announced at £1 million and increased to £2.5 million in December 2025 — and gov.uk's older technical note still shows £1 million and states the allowance is not transferable. It is out of date and should not be relied on. Second, relief has never been available for investment businesses, which excludes most property letting: the two-year ownership condition is the easy part, and the trading test is where property fails.
Unquoted shares including AIM holdings now get 50% relief only from 6 April 2026, and are not relevant to the 100% allowance at all.
Acumon advises property investors and landlords through property taxes, capital allowances and inheritance tax planning work, with landlord accounting alongside — see also our guide to real estate tax. If you hold commercial property and have never had a capital allowances review, that is usually the largest unclaimed relief on the balance sheet.