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Conversion of Commercial to residential

26/04/2019 08:17:15
I have an investment property property which comprises a mixture of commercial with residential above. I am converting some of the commercial space to residential. Most of the expenditure is capital however there are some existing carpets and window blinds which could be retained if they were in good condition but really need replacing due to there age. Can these items be considered a maintenance expense and set against income?
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Re:Conversion of Commercial to residential

29/04/2019 12:16:51
Hi,

Due to the fact that you would be replacing the existing carpets and window blinds that were initially used in a commercial property business (and they will now be used in a residential property business). The expenditure would not qualify for any relief under the Domestic Renewals Allowance (replacing domestic items) as the expenditure would be treated as being an initial cost in respect of the residential property business.

The initial cost of purchasing such items, provided for use by a tenant in a residential property business is not a deductible expense and would only be an allowable expense if they were replaced again in the future.

A deduction for capital expenditure can only be considered for the cost of actually replacing domestic items such as the carpets and window blinds that had already been provided for use in the residential property. For further information please see the guidance here:

Income Tax when you let property: work out your rental income

Thanks for your question.

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