Why it matters
What Capital Allowances means for a landlord
Landlords often assume they can write down the cost of a new boiler, kitchen or furniture as capital allowances the way a business does, for ordinary residential lets, they usually cannot. Inside a dwelling, replacing domestic items goes through Replacement of Domestic Items Relief, and improvements are capital costs set against CGT on sale. The genuine capital-allowances opportunity is narrow (communal-area plant in a larger HMO, or commercial units), and with the furnished holiday let regime gone from April 2025 the old FHL route no longer exists.
Worked example
How it plays out
Ruth owns a large HMO with a shared kitchen and laundry room. She may be able to claim capital allowances on qualifying equipment in the shared areas, such as the laundry machines, but not on furniture inside the tenants’ rooms, where replacement of domestic items relief can apply when items are replaced.
Common mistakes
Where landlords go wrong
- 01Claiming capital allowances on furniture inside a home.
- 02Missing allowances on equipment in shared areas of a larger HMO.
- 03Following old holiday let advice after April 2025.
What to do
A short checklist
- List equipment in shared areas separately.
- Take advice on which items qualify.
- Keep invoices showing where items are installed.
Sources
Checked against these sources on 16 September 2026. A guide to the rules in England, not legal advice: for a dispute or a possession claim, speak to a solicitor.
