Can landlords claim expenses when the property is empty?

Usually, yes. In 2026-27, costs while a let property sits empty between tenants are allowable in the usual way if you are trying to re-let, and costs from up to 7 years before your first let can count too.

Checked against HM Revenue and Customs' Property Income Manual (PIM), GOV.UK and the legislation on 17 October 2026, for individual landlords in England.

Empty between tenants: your business carries on

HMRC's manual (PIM2510) says a letting business "will not normally cease just because the tenant quits and the property is empty while the customer is looking for a new tenant". If you have been trying to find tenants, or the property is empty while repairs are done, HMRC normally accepts the business has not stopped.

In our reading, that means running costs in a gap are tested exactly as they are during a let: they must be wholly and exclusively for the letting. HMRC names some of them:

• Insurance. PIM2110 allows premiums for properties "held for letting but vacant for the time being".
• Council tax. PIM2140 says the owner pays it on an empty dwelling, and gives an empty property as a case where a landlord pays it. GOV.UK lists council tax, water rates, gas and electricity as expenses if you pay them yourself.
• Mortgage interest. PIM2052 says you do not have to split the interest if you are genuinely trying to let the property but cannot find a tenant. It is not deducted as an expense: it goes into the basic-rate tax reduction, 20% for 2026-27. Our guide on section 24 mortgage interest explains that reduction.

Before your first let

PIM2505 says a letting business cannot begin until the first property is let. Section 57 of the Income Tax (Trading and Other Income) Act 2005, applied to property businesses by sections 272 and 272ZA, then helps with costs paid earlier. A cost paid up to 7 years before the start, which would have been allowable once letting began, is treated as paid on the first day.

HMRC's examples: rent on a property leased only to let it can qualify, but rent on your own home before you let it cannot. Once your first property is let, costs of getting a second one ready are part of the same business. GOV.UK adds that work to put a run-down property into a fit state to let is usually capital, not an expense.

When you or family use it in a gap

PIM2130 says costs on a property a relative lives in rent-free are likely to be personal, not business. A relative house-sitting between lets is different: about a month in a period of 3 years or more will not normally lose relief, if the property is genuinely available and you are seeking tenants. Where a property is let commercially some of the time and used free by family at other times, the costs are split on a reasonable basis. PIM2052 says the same for interest, taking account of how much and for how long the property is used for letting.

PIM2510 adds that if letting stops and you move in yourself, the business is normally treated as ending, unless you still let other property.

When letting stops for good

A single-property business normally ends when the tenant leaves and you live there or decide not to re-let. GOV.UK says losses carried forward are then usually lost.

After that, PIM3000 says costs that would have been allowable, such as "background heating for empty premises to keep down condensation" before a sale, can be set against receipts that arrive after the business ended. Section 125 of the Income Tax Act 2007 gives a separate relief for a short list of payments within 7 years, such as the cost of collecting a rent debt, claimed within a year of the 31 January filing date. In our reading, council tax and bills while you wait to sell are not otherwise relieved.

Which costs count when

The interest entries for repairs and house-sitting are our reading of PIM2052 and PIM2130.

A worked example

A landlord in England lets two flats in 2026-27. Flat B is let for 3 months, empty and advertised for 2 months, lived in rent-free by the landlord's son for 3 months, then let again for 4 months. That is 9 months of letting use out of 12. In our reading, a time split is a reasonable basis here.

The landlord deducts £360 + £440 = £800 from rent. The £4,500 of interest goes into the tax reduction: 20% × £4,500 = £900, unless the usual limits on the reduction cut it. Because Flat A stays let, the business carries on throughout. This is an example only.

What this means for you

An empty spell does not stop your costs counting, if you can show you were trying to re-let. Keep that evidence, and keep family use separate, because that is where the split happens. More on everyday costs is in what expenses landlords can claim.

Steps to record costs in an empty spell

1. Note the date each tenant left and the next one moved in.
2. Keep proof you were trying to re-let: adverts, agent emails, viewing dates.
3. Record council tax, bills and insurance you paid for each empty month.
4. Note any days you, family or friends stayed, and whether they paid rent.
5. Split shared yearly costs, including mortgage interest, for any private use.
6. If you stop letting for good, record the date and keep receipts for later costs.

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