Home / Glossary / Letting agent fees
What is Letting agent fees?
Last verified 31 October 2026
Letting agent fees are the charges an agent makes for finding tenants, collecting rent and managing a let property. When you pay them yourself, HMRC lists letting agent and management fees as allowable expenses against your rental income.
Why it matters to landlords
The common trap is the agent's monthly statement. Agents usually take their fee out of the rent and pay you the balance, so the money in your bank account is lower than the rent your tenant paid. For tax you report the full rent as income and the fee as a separate expense. HMRC's manual says rent collection costs are generally deductible when the property is let on a commercial basis.
Fees for other work on a first letting can be capital rather than revenue. The manual says the costs of a first letting for more than a year, such as agent and surveyor fees and commission on drafting a lease, are not deductible, while costs for a let of a year or less can be. If you are unsure which a charge is, ask the agent to itemise the invoice.
Example
Chloe's agent collects £1,000 a month from her tenant and keeps 10%. Over the year the tenant pays £12,000 and the agent keeps £1,200, paying Chloe £10,800. In her records Chloe shows £12,000 of rental income and £1,200 of letting agent fees, not £10,800 of income.
MTD for Landlords Who Use a Letting Agent →