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What is Buy, refurbish, refinance (BRR)?
Last verified 31 October 2026
Buy, refurbish, refinance, often shortened to BRR, is a strategy where an investor buys a property, improves it, lets it and then refinances on the higher value to take money out for the next purchase.
Why it matters to landlords
The refurbishment stage raises a tax question: whether the work is a repair or a capital improvement. HMRC's guidance says capital improvements are not deductible against rental income, while ordinary repairs are. A £300 plumbing and decorating repair is claimable in HMRC's example. Work that upgrades the property, such as an extension, is capital and may instead matter for Capital Gains Tax when you sell.
The refinance stage raises another. HMRC says interest on an increased buy-to-let mortgage may be deductible if the extra loan is wholly and exclusively for the purposes of the letting business, and interest on borrowing above the property's value when it entered the business is not. Record what you do with any money you take out.
Example
Mira buys a run-down flat for £90,000, spends £18,000 on a new kitchen extension and £2,000 on decorating, then refinances at £140,000. The £2,000 is a repair. The £18,000 is capital. She should apportion the interest on the extra borrowing by how the released money is used.
Allowable Expenses for Landlords (2026) →