As with all things in life….nothing lasts forever. So, unfortunately for landlords, they will have to replace items or refurbish their property.
Is there any benefit besides having an improved rental property?
The costs you will incur come under this simple Rule of thumb – if it’s incurred wholly and exclusively for the purpose of earning the rent, then it’s a tax deductible cost.
These allowable items (e.g. install new boiler, refurbish bathroom, etc.) are taken as a deduction over 8 years against the net rental income.
If you have taken a loan out to carry out the refurbishment, then the interest on this loan is also tax deductible.
If the costs are repairs more so than refurbishments, then these are allowable in the year that they occur.