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Expenses for repair and maintenance incurred prior to the first letting income received may be allowable provided certain conditions are met; namely that:

•    the cost is for the replacement of worn or dilapidated items;
•    the property was in a fit state of repair for use in the letting business prior to its actually being let;
•    the price paid for the property was not substantially reduced to take into account its dilapidated state of repair;
•    the purchase price, if reduced, was reduced only to take into account ‘normal wear and tear’.

Example:
The surveyor’s report undertaken on the purchase of a property will often include an estimate of the rental income that could be derived from a property; this can be useful evidence that the property was in a ‘fit state of repair’ before money is spent on repairs.

Alternatively the taking of photographs before repairs are undertaken could be admitted as proof.