I’ve just bought a property that I’m planning on letting out. It needs a new kitchen, bathroom and a few other essentials before I can market it. Can I claim the cost of the refurbishments for tax purposes?
It depends on whether the property was in a fit state to rent out before you carried out the work. If the property was legally habitable, then the refurbishments would probably be classed as ‘repairs’ and would probably be allowable. If the property was in such a bad state that it would have been illegal (and immoral) to rent it out, then the refurbishments would probably be classed as ‘improvements’ and wouldn’t be allowable.
As with all of these things we’d need to review individual circumstances (which is why we’ve used the word ‘probably’ quite a lot), before we could say for sure whether a claim would be allowable.