Property Depreciation Calculator 2026-27
Estimate UK property capital allowances for 2026-27. Residential lettings get no depreciation — see what you can claim instead; commercial property gets AIA/WDA on fixtures plus the 3% Structures & Buildings Allowance. See your tax saving at your marginal rate.
Calculate the declining value of your assets over time.
Estimates only. Get a capital allowances surveyor's depreciation schedule for HMRC-compliant claims.
How investment property depreciation works in the United Kingdom
Dwellings: no depreciation at all
Unlike Australia or the US, the UK gives residential landlords no depreciation and no capital allowances on a dwelling or its contents (CAA 2001 s.35). What you can deduct instead: day-to-day repairs and maintenance, the like-for-like replacement of domestic items (sofas, white goods, carpets — not the initial furnishing), and a 20% basic-rate credit on mortgage interest.
Commercial property is different
Commercial buildings (shops, offices, industrial units) do qualify for capital allowances: plant & machinery fixtures (heating, lifts, electrical systems) via the Annual Investment Allowance (100% of up to £1m in the year of spend) or 18% writing-down allowances, integral features at 6%, and the Structures & Buildings Allowance — 3% a year straight-line on qualifying construction or renovation under contracts entered into on or after 29 October 2018.
Furnished holiday lets
The FHL regime — which used to give capital allowances on furnished holiday lets — was abolished from April 2025. Existing pools keep writing down, but new FHL claims are no longer possible.
3% a year straight-line on qualifying commercial construction cost
3% of qualifying construction cost
The Structures & Buildings Allowance deducts 3% of qualifying construction or renovation cost each year, straight-line, over 33⅓ years — commercial structures only, never dwellings, and only for contracts entered into on or after 29 October 2018. Land and planning costs are excluded.
| Build cost | SBA/year (3%) | Tax saving @ 40% |
|---|---|---|
| £200,000 | £6,000 | £2,400/year |
| £350,000 | £10,500 | £4,200/year |
| £500,000 | £15,000 | £6,000/year |
Depreciation on individual depreciating assets
Replacement of Domestic Items relief (residential)
For a dwelling you can deduct 100% of the cost of replacing a domestic item like-for-like — furniture, furnishings, white goods, kitchenware — in the year you replace it. The initial furnishing of a property does not qualify, upgrades are restricted to the cost of an equivalent item, and any sale proceeds for the old item reduce the claim.
Fixtures pools (commercial)
Commercial fixtures go into the main pool (18% reducing balance) or, for integral features such as electrical and cold-water systems, the special rate pool (6%). In practice most businesses use the AIA to write off up to £1m of qualifying spend in full in the year of purchase.
Do you need a capital allowances specialist?
Not for residential
There is no UK equivalent of the Australian quantity-surveyor depreciation schedule — a residential landlord has nothing to schedule. Keep receipts for repairs and domestic-item replacements; that is all HMRC needs.
For commercial purchases, often yes
When you buy a commercial building, the fixtures element of the price must be fixed with the seller in a s.198 election (within two years of completion) before you can claim allowances on it. Capital-allowances specialists commonly identify 10–30% of a purchase price as qualifying fixtures — usually worth the fee on larger buildings.
Frequently asked Frequently asked questions
How much depreciation can I claim on an investment property?
On a UK residential buy-to-let: none — no depreciation, no building allowance, no plant & machinery allowances in a dwelling. Your deductions are repairs, running costs, replacement of domestic items, and the 20% mortgage-interest credit. On a commercial property, year-one claims can be substantial: AIA can write off up to £1m of fixtures in full, plus 3% SBA on qualifying construction cost.
Can I depreciate an older property?
Age is irrelevant for UK dwellings because they get no allowances at any age. For commercial property, the SBA only covers construction under contracts entered into on or after 29 October 2018 — older buildings get no SBA — but fixtures allowances on purchase (via a s.198 election) work for buildings of any age.
Does depreciation reduce the CGT base cost?
There is no depreciation to claw back on a UK dwelling. For commercial property, any SBA you have claimed is added to your chargeable gain when you sell, and plant & machinery disposals can trigger a balancing charge if the sale proceeds allocated to fixtures exceed the written-down pool value.
How do you claim each year?
Claims go in the property or business pages of your Self Assessment return (or company tax return) each year. AIA is claimed once, in the year of spend; writing-down allowances and the 3% SBA continue annually. Replacement-of-domestic-items relief is claimed in the year each replacement happens.
Where these figures come from
Property and mortgage figures on this page are drawn from HMRC (Stamp Duty Land Tax), The Bank of England (mortgage-rate data), The FCA (mortgage conduct rules), and HM Land Registry (house-price data).
- Stamp Duty Land Tax (SDLT) rates — GOV.UK — Stamp Duty Land Tax.
- UK mortgage rate & lending data — Bank of England — Mortgage lending statistics.
- FCA mortgage conduct rules — FCA — Mortgages.
- UK House Price Index — GOV.UK — UK House Price Index.
- Rental income & Section 24 mortgage interest relief — GOV.UK — Rental income and tax.
Last checked: April 2026. Rates and thresholds are reviewed against the source of record each November, when annual adjustments for the following tax year are published.
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To improve your property outcome, focus on the inputs with the highest leverage — these typically produce more impact per dollar than broad changes.
A larger deposit reduces LVR, eliminates LMI at 80%, and may unlock better rate pricing. Even £10k–£20k extra deposit can shift the cost picture.
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