The short answer
Service charges and ground rent on a leasehold flat you let are allowable, in box 24.
It's a revenue cost of running the letting, so it reduces your taxable rental profit at your top rate of tax.
What you can and can't claim
| You can claim | You can't claim |
|---|---|
| Annual service charges | Major works that improve the building (the improvement share is capital) |
| Ground rent | Lease extension premiums (capital) |
| Contributions to a sinking fund once spent on repairs |
Worked example
A flat has £2,100 of service charges and £300 ground rent: claim £2,400 in box 24.
| Your tax band | Saving 2026/27 | Saving 2027/28 |
|---|---|---|
| Basic rate | £480 | £576 |
| Higher rate | £960 | £1,056 |
| Additional rate | £1,080 | £1,176 |
Savings assume the whole amount is taxed at your top rate. Use the landlord tax calculator for your exact figure.
Where it goes on your tax return
On the UK property pages (SA105), enter it in box 24 (rent, rates, insurance, ground rents etc). Online, it's the matching question in the property section. Our SA105 helper sorts all your costs into the right boxes.
Repair or improvement: how HMRC decides
A repair restores something to its previous condition, even if modern materials make it a bit better. An improvement adds something new or makes it significantly better, and is capital. Timing also matters from 2027: a cost paid before 6 April 2027 saves tax at 20%/40%/45%, after that at 24%/44%/49%. See all landlord expenses A to Z.
Frequently asked questions
Are sinking fund contributions allowable?
Usually only when the money is spent on repairs, not when it's paid into the fund. Ask your managing agent for a breakdown.
Is a lease extension tax deductible?
No. It's a capital cost for Capital Gains Tax.
Sources
- GOV.UK: Work out your rental income when you let property
- HMRC: UK property notes (SA105 Notes 2025)
- HMRC Property Income Manual: repairs, replacements and allowable costs
Sources last checked 10 November 2026. See all our sources and how we keep pages up to date.