As a landlord in the UK, maintaining your rented property comes with its own costs, from repairs to replacing those things that have wear and tear. Did you know that the wear and tear allowance for landlords can give tax relief on these costs?
In 2025, as living costs rise and regulations tighten, it’s more essential than ever to know what you can claim. Whether it’s a broken fridge or a worn-out carpet, understanding these rules could save you hundreds or even thousands of pounds in tax for businesses.
The regulations regarding property expenses have changed over the years. Many landlords are still unclear about what they can and can’t claim under the new system.
In this guide, we’ll explain the wear and tear allowance for landlords, how the regulations have changed, and how you can claim replacement relief so you stay compliant and tax-efficient in 2025.
What Is a Wear and Tear Allowance for Landlords?
Wear and tear allowance was a tax allowance that could be claimed by landlords for depreciation in furnishings in a fully furnished letting property. It is recognised that furniture, appliances, and fittings wear out over time and will need to be replaced, and can be claimed.
In short, it’s a way for landlords to document the natural wear and tear on things in their rental property over time. Think about it, tenants come and go, and things such as sofas, curtains, or washing machines have a limited lifespan.
The allowance lets you deduct a portion of these costs from your taxable rental income and enjoy tax relief.
Before 2016, landlords had no obligation to provide receipts or proof that they’d replaced something. They could simply claim 10% of their rent (apart from council tax and bills) per annum as an allowance to account for this depreciation.
For instance, if your yearly rental income was £12,000, you can claim £1,200 for wear and tear, regardless of actual spending.
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When was the 10% Wear and Tear Allowance Abolished?
It was April 2016 when a golden period for landlords ended. Before, if you rented out a fully furnished property, you could claim 10% of your net rental (i.e., rent minus things like council tax or water rates you’d paid) as a loss.
It was an easy flat rate that compensated for wear and tear on furnishings without needing you to provide a receipt for everything.
HMRC replaced it with the new relief under the name of the ‘Replacement of Domestic Items Relief’. Replacing the system was an attempt to make the system fairer by allowing all landlords, even those letting unfurnished or partly furnished properties, to claim tax relief, but only on the replacement of things that actually cost them.
With the new rules, landlords are no longer able to claim a percentage. They are required to keep receipts and only claim what they actually spend on the allowable replacements.
How Wear and Tear Rules Change in 2016?
One of the significant changes in property taxation was the one in 2016. Before that, it was only fully furnished rental properties that were subject to the wear and tear allowance for landlords.
Under the Replacement of Domestic Items Relief, which applies to landlords of residential properties (except Furnished Holiday Lets or commercial property), they can claim relief when they replace household furnishings and other items.
Here’s how the new system differs from the old one:
| Feature | Before 2016 (Old Wear and Tear Allowance) | After 2016 (Replacement Relief) |
| Eligibility | Only for fully furnished properties | Applies to all furnished, part-furnished, and unfurnished properties |
| Calculation | 10% of rental income (flat rate) | Actual cost of replacing items, minus any sale proceeds |
| Proof required | None | Receipts and records needed |
| Items covered | Furniture, appliances, furnishings | Replacement of domestic items only |
| Fairness | Benefited some landlords disproportionately | Reflects real expenses incurred |
The shift to this new setup has made it necessary for the landlord to keep all records for claiming the relief, and they can’t claim if they didn’t incur that expense.
What Is Included in Wear and Tear Allowance?
The replacement of domestic items relief is now officially called Replacement of Domestic Items Relief. Though the term wear and tear allowance for landlords is no longer formally applied.
By this system, you can claim tax deduction in the replacement cost of household items that are being used by tenants in a residential property.
Here’s what’s included:
- Armchairs, sofas, and dining tables.
- Beds, wardrobes, and mattresses.
- Curtains and carpets.
- Fridges, freezers, dishwashers, and washing machines.
- Kitchen Appliances, Cookers, and Small Appliances (TV).
- Food service wares, crockery, cutlery.
Nevertheless, significant exceptions also exist:
- You cannot claim items that are in common areas in the multi-occupancy property (such as halls or common lounges).
- You can not claim the purchase price of furnishing, just the replacements.
- You cannot claim improvements (such as a regular fridge to a new smart fridge).
In the case that you purchase a replacement of a better quality, you can only claim the similar cost of a corresponding product. The extra amount of upgrade is not deductible.
How to Work Out Wear and Tear Allowance for Landlords or Replacement Relief for Landlords?
To make such claims, the landlords should know the calculation of replacement relief.
The following is an easy step-by-step process:
- Identify the item replaced
It should be portable household goods that are for tenants.
- Determine the price of the new product.
This is what you paid to get the old one changed.
- Subtract any proceeds
In case you have sold or part-exchanged the old item, deduct the value.
- Add all related costs
Add all costs like delivery costs, installation costs, or disposal of the old one.
For example:
You changed an old sofa for £800. You sell the old one at £100, and the delivery charges are £50.
Your relief = (£800 – £100) + £50 = £750
£750 is deductible from rental income for the calculation of taxable profit.
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Claiming Wear and Tear Allowance or Replacement Relief
Although the term “wear and tear allowance” is no longer in use. It is an informal use of the term “Replacement of Domestic Items Relief” by landlords.
To claim this relief:
- Ensure that you have records and receipts of all replacements.
- Make sure that the replaced thing is for the tenant and not for the landlord.
- Claim using your Self Assessment tax return, normally in the property expenses section.
- Do not claim twice; you cannot claim for repair costs and replacement relief of the same article.
When you have an accountant, they would normally have it incorporated in your annual property accounts. However, when you prepare your own return, it is always important to make correct calculations.
Wear and Tear Allowance for Unfurnished Properties
Before 2016, wear and tear allowance for unfurnished properties was not for any landlord of ‘unfurnished’ premises. This was the reason that made HMRC implement the new replacement relief system.
However, this does not mean that you cannot now claim relief when you replace an item that is provided to the tenant, even though your property is unfurnished or partly furnished.
An example is when you rent an empty house, but install new goods (such as a cooker or washing machine) in it, then you can get replacement relief when they become worn out.
This rule does not, however, apply to fixtures that are part of the property itself, i.e., sinks, baths, or boilers. They are regarded as repairs or capital improvements, and you will have to treat them differently regarding taxation.
Why Understanding Replacement Relief Matters in 2025?
As the taxation of rental property is getting more complicated, landlords should know the difference between various categories of property costs.
It is important to be clear on the wear and tear allowance for landlords(replacement relief):
- Tax efficiency: You are allowed to decrease taxable income and maximise net profit.
- Compliance: It keeps your tax position compliant with HMRC requirements by properly claiming the replacement relief.
- Improved financial planning: It is important to know the deductibles to forecast the budgets.
- Fairness among landlords: This has introduced equality among the landlords, rather than just for the landlords of the fully furnished properties.
Every eligible tax deduction is important given the financial constraints of landlords in 2025, which are due to increased mortgage rates, as well as strict policies and regulations.
The Bottom Line
The wear and tear allowance for landlords has changed a lot as the old 10% rule was scrapped in 2016. Although the old system has become more complex, the present-day ‘Replacement of Domestic Items Relief’ brings more reasonable and more precise deductions to landlords with valid records.
In brief, the wear and tear allowance has evolved significantly from the year 2016, moving towards a more evidence-based approach. It could involve additional administration, but it will reward those who take care of their premises. You can be sure of the guidance from the HMRC website or a professional. Say good luck to your tenants who are kind to the furniture!
Disclaimer: The information provided on AccountingFirms.co.uk is for informational purposes only and should not be considered as financial advice. Always consult with a professional accountant to ensure compliance with UK laws and regulations.