Replacement of Domestic Items Relief

The replacement of domestic items relief is a tax relief that you can use to claim costs related to replacing things like furniture, household appliances, kitchenware, etc., if you’re a landlord and earn rental income. Think of it like a way to claim expenses as a landlord for buying things for the property. It was introduced as a replacement to the Wear and Tear Allowance in 2016 (this allowance used to let you claim 10% off your rent as a fixed “maintenance” cost).

What qualifies as a “domestic item”:

• The item must be used only by your tenant
• The item must be a replacement of the original one – it can’t be new or a significant improvement upon the original item. For example, you can’t replace a £50 table with a £300 table and claim the whole cost.

It’s important to be aware that you can’t claim the replacement of domestic items relief if you are also claiming the Rent a Room relief or if the property is a furnished holiday letting such as an AirBnB. The Rent a Room scheme allows you to earn up to £7,500 a year tax-free by renting out a part of your home, as long as you also live there. If what you earn from renting out the room is less than £7,500, you don’t even need to declare it to HMRC. It’s completely exempt from tax and does not count towards your Personal Allowance.

If you make more than £7,500, you still have to file a Self Assessment tax return, but you can claim £7,500 as a flat tax-free allowance.