Landlord Tax Glossary

Key facts

Landlord tax has its own vocabulary — from Section 24 to SA105.
Most terms are defined in UK legislation or HMRC guidance; this glossary links to official sources.
Use Ctrl + F (or Cmd + F on Mac) to search for a specific term.
Understanding these terms helps you claim the right expenses and avoid costly mistakes.

A – D

Term	Definition
Allowable expenses	Costs that can be deducted from rental income to reduce your tax bill. Must be incurred “wholly and exclusively” for the rental business.^[1]
AST (Assured Shorthold Tenancy)	The most common type of tenancy in England and Wales. It gives tenants the right to stay for a fixed period and sets out the landlord’s obligations.
Buy-to-let	A property purchased specifically for the purpose of letting to tenants. Buy-to-let mortgages have different terms from residential mortgages.
Capital expenditure	Spending on improvements, additions, or new assets (as opposed to repairs). Not deductible from rental income but reduces Capital Gains Tax on disposal.^[1]
CGT (Capital Gains Tax)	Tax charged on the profit when you sell a property (or other asset) that is not your main home. Residential property rates are 18% (basic) and 24% (higher) for 2026/27.^[3]
DAC7	An EU/OECD directive requiring digital platforms (e.g. Airbnb, Booking.com) to report host earnings to tax authorities. Implemented in the UK from January 2024.
Deposit Protection Scheme	A government-backed scheme where landlords must place tenant deposits. Failure to protect a deposit can result in penalties of 1–3 times the deposit amount.
Domestic Items Relief	The Replacement of Domestic Items Relief allows landlords to deduct the cost of replacing furniture, appliances, and kitchenware on a like-for-like basis.^[1]

E – L

Term	Definition
EPC (Energy Performance Certificate)	A legally required certificate rating a property’s energy efficiency from A to G. Rental properties must have at least an E rating (with limited exceptions).
FHL (Furnished Holiday Letting)	A now-abolished tax regime that treated qualifying holiday lets as a trade. Abolished from April 2025, with transitional rules for existing claims.
Form 17	A declaration to HMRC that jointly owned property income should be split in a proportion other than 50:50 between spouses or civil partners.
Ground rent	An annual charge paid by a leaseholder to the freeholder. Deductible as a landlord expense.^[1]
HMO (House in Multiple Occupation)	A property let to 3 or more tenants from 2 or more separate households who share facilities. Larger HMOs (5+ tenants) require a mandatory licence.
Improvement	Work that enhances a property beyond its original condition (e.g. extension, new central heating). Capital expenditure, deductible from CGT on sale, not from rental income.^[1]
Landlord insurance	Specialist insurance covering buildings, contents, public liability, and rent guarantee. Premiums are a deductible expense.

M – R

Term	Definition
MTD (Making Tax Digital)	HMRC’s programme requiring digital record-keeping and quarterly updates. Applies to landlords with property income over £50,000 from April 2026.
NRL (Non-Resident Landlord)	A landlord whose usual home is outside the UK. Letting agents must deduct basic-rate tax from rent unless the NRL has HMRC approval to receive rent gross.
Private Residence Relief (PRR)	A CGT exemption for your main home. A property that was once your main residence gets PRR for the period of occupation plus the final 9 months of ownership.^[3]
Property allowance	A £1,000 annual tax-free allowance for property income. If gross income is under £1,000, no tax is due and no return is needed.
Rent-a-Room Scheme	A scheme allowing you to earn up to £7,500 tax-free from letting furnished rooms in your own home.
Repair	Work that restores a property to its original condition (e.g. replacing a broken boiler with a modern equivalent). Deductible from rental income.^[1]

S – Z

Term	Definition
SA105	The UK property supplementary pages of the Self Assessment tax return where rental income, expenses, and finance costs are reported.
SDLT (Stamp Duty Land Tax)	Tax paid when purchasing property in England and Northern Ireland. Buy-to-let and second properties attract a 5% surcharge on top of standard rates.^[2]
Section 24	The restriction on mortgage interest relief for individual landlords. Finance costs receive a 20% tax credit instead of being deducted from rental income.^[1]
Service charge	Payments to a management company for the upkeep of communal areas in a leasehold property. Deductible as a landlord expense.
60-day rule	The requirement to report and pay CGT on UK residential property disposals within 60 days of completion.^[3]
Void period	A gap between tenancies when the property is empty. Expenses during void periods are still deductible provided you intend to re-let.
Wear and tear	The former 10% wear-and-tear allowance for furnished lettings, replaced in 2016 by the Replacement of Domestic Items Relief.
Wholly and exclusively	The test for whether an expense is allowable — it must be incurred wholly and exclusively for the rental business.^[1]

Tip: This glossary covers the most commonly encountered landlord tax terms. For full legal definitions, refer to HMRC’s Property Income Manual.

Frequently Asked Questions

What is the SA105?

The SA105 is the UK property supplementary pages that form part of your Self Assessment tax return. You use it to report rental income, expenses, and finance costs from all UK property lettings. A separate page (SA106) is used for overseas property income.

What does Section 24 mean?

Section 24 of the Finance (No. 2) Act 2015 restricts the way individual landlords can claim tax relief on mortgage interest and other finance costs. Instead of deducting finance costs from rental income, you receive a 20% tax credit. This means higher-rate taxpayers pay more tax than before the restriction.

What is the difference between a repair and an improvement?

A repair restores the property to its original condition and is deductible from rental income. An improvement enhances the property beyond its original state (e.g. adding an extension, installing central heating for the first time) and is capital expenditure, deductible only from Capital Gains Tax when you sell.

What is a void period?

A void period is a gap between tenancies when the property is empty. Expenses incurred during void periods (council tax, insurance, maintenance) are still deductible, provided you intend to re-let the property and have not converted it to personal use.

Sources

Property income: working out rental income — GOV.UK
Stamp Duty Land Tax — GOV.UK
Capital Gains Tax: report and pay — GOV.UK