Can landlords claim letting agent fees?

Yes. GOV.UK lists letting agent fees and management fees among the expenses landlords can claim, so for 2026-27 they come off your rent. Fees for buying or selling, or for a first letting of more than 1 year, are capital.

The rules below follow GOV.UK and HM Revenue and Customs' Property Income Manual (PIM), checked on 17 October 2026, and apply to individual landlords in England.

What the rules say

GOV.UK's guide to working out rental income lists "letting agent fees and management fees" among the expenses you can claim, along with legal fees for lets of a year or less and advertising for new tenants. HMRC's manual (PIM2200) adds that the cost of rent collection is generally deductible, as long as it relates wholly and exclusively to property let on a commercial basis.

There are two limits, both in PIM2120:

• Buying a property. Professional fees are capital if they relate to a capital matter, such as the purchase of property. Legal costs of acquiring a property are not allowable.
• A first letting of more than one year. The costs of the first letting or subletting of a property for more than one year are capital. HMRC names agent's and surveyor's fees and commission, and legal costs such as drawing up the lease. Costs for a let of a year or less can be deducted.

PIM2120 also says that where a replacement lease follows closely on a previous one, on broadly similar terms, a change of tenant will not normally make the costs disallowable. But where a long lease replaces a short lease, or the owner lives in the property between lets, the costs are capital. Capital costs are not lost, though. HMRC says they may be allowable when you work out any capital gain or loss on selling the property.

Which agent fees count

Tenant-find or fully managed

In our reading, the type of service does not change the rule. A tenant-find fee pays the agent to find a tenant, and a fully managed fee also covers collecting rent and running the let. Both are agent's fees, so both are allowable unless they are tied to buying, selling or a first letting of more than one year. A 12-month tenancy is a let of a year, not more than a year, so in our reading its tenant-find fee is deductible even on the first letting.

VAT on the fees

HMRC's business manual (BIM31535) says that where a business is not VAT registered, the VAT it pays on costs cannot be relieved, so it is part of the price paid and the deductible figure includes it. In our reading, the same applies to a landlord who is not VAT registered: you claim the fee including VAT.

Fees taken from the rent

Agents often pay you the rent with their fee already taken off. GOV.UK's Making Tax Digital guidance says that if you only know your income after expenses are deducted, you ask for the full amount, then create one digital record for the full income and one for the expenses. So the gross rent and the fee each go in your records.

Fees when you sell

HMRC's capital gains manual (CG15250) lists fees paid for the professional services of an agent, and the costs of advertising to find a buyer, as incidental costs of disposal. They do not come off your rent, but they do reduce your gain.

A worked example

A landlord in Leicester lets one flat for £1,000 a month through a fully managed agent. She is not VAT registered. A new 12-month tenancy starts in 2026-27, replacing a previous tenant on similar terms. The agent's statements for the year show:

She records income of £12,000 and expenses of £2,190, not £9,810 of income. Her profit before any other costs is £12,000 − £2,190 = £9,810. This is an example only.

What this means for you

In our reading, for most landlords with an agent, the whole of each fee on the statement is an allowable expense, VAT included, and the main thing to watch is a first letting of more than one year, such as the first long let of a newly bought property. Keep the agent's statements, because they show both the gross rent and every fee. The guide to landlord expenses covers the rest.

Steps to claim your agent fees

1. Ask your agent for a statement for each month or quarter showing the gross rent and each fee.
2. Record the gross rent as income, and each fee as an expense, including any VAT if you are not VAT registered.
3. Check whether any fee relates to buying a property or to a first letting of more than one year. Keep those apart as capital.
4. Keep fees for selling a property for your Capital Gains Tax figures.
5. Keep the statements and invoices for at least 5 years after the 31 January deadline for that year's tax return, as GOV.UK says.

Under Making Tax Digital (MTD), each fee becomes a digital record with an amount, a date and a category. The free MTD check shows when it starts for you, and the landlord section has more guides.