Cost of installing heat pumps?

Engineer installing a heat pump unit for a rental property while considering installation costs and tax implications.

by Readers Question

12:01 AM, 8th June 2026, 3 weeks ago 6

Categories:

Landlord News Landlords Questions

Hi everyone, I’m looking to install a heat pump for one of my lets, and if I have this right, I cannot claim the costs as day-to-day running costs?

Even though the gas boiler is all but dead, I have been told it would not pass another gas inspection due this summer.

Also, have I got it right that I cannot claim it as a capital cost when I sell the property?

Can anyone who knows about taxes and things comment?

After all, I thought this was what the government wanted us to do?

Thanks,

Sally

Editor’s note: In most cases, replacing a gas boiler with a heat pump is treated as a capital improvement rather than a repair, so the cost is generally not deductible against rental income as a day-to-day expense. However, it should normally be added to the property’s capital gains tax base cost and may therefore help reduce any CGT liability when the property is eventually sold. As always, tax treatment depends on the specific facts, and landlords should seek professional advice where significant sums are involved.

Share This Article

Tags: gas boiler, heat pump cost, heat pump installation, heat pumps

Comments

acctsol

Member Since February 2018 - Comments: 23

10:02 AM, 8th June 2026, About 3 weeks ago

on what basis does the editor state that it should be treated as a capital expense. it could be argued both ways in my opinion. reasoned opinions in this matter would be appreciated as this will come up more and more

Report Comment Reply
Steve Rose

Member Since September 2024 - Comments: 114

10:34 AM, 8th June 2026, About 3 weeks ago

Reply to the comment left by acctsol at 08/06/2026 – 10:02
I agree. Surely one is replacing one method of heating with another of similar scope.
Replacing single-glazed windows with double-glazing, although technically a capital improvement, has been allowed as ‘repairs’ for years.

1 Report Comment Reply
Gunga Din

Member Since September 2015 - Comments: 224

11:12 AM, 8th June 2026, About 3 weeks ago

I had a gas engineer tell me a boiler was beyond economic repair. It was 18 years old at the time. My regular guy’s opinion differed – replaced a couple of parts and its still running two years later. The first guy was clearly angling for a replacement job.

Report Comment Reply
Steve Rose

Member Since September 2024 - Comments: 114

11:28 AM, 8th June 2026, About 3 weeks ago

Where the upgrade is required by legislation and broadly the same job as the original, HMRC confirmed two years ago that the cost of installing heat pumps can be offset against revenue.
https://www.icaew.com/insights/tax-news/2024/mar-2024/hmrc-corrects-advice-given-on-tax-relief-for-boiler-repairs

1 Report Comment Reply
stephen buck

Member Since April 2017 - Comments: 6

1:00 PM, 13th June 2026, About 2 weeks ago

Can it not be claimed under Capital Allowances?

Report Comment Reply
Landlord Phil

Member Since June 2017 - Comments: 98

5:23 PM, 24th June 2026, About 5 days ago

Before you make a decision to go down the heat pump route, get a lot of quotes. There are still cowboy & incompetent installers out there. Also remember that the temperature of the water after leaving a heat pump is significantly lower than a gas boiler, you may need to upgrade piping & radiators. And you will need a space for a hot water tank.

I know this, as I had a cowboy installation at my own home. It cost £6k to reconfigure, even though the house had been fully replumbed, new radiators fitted (correctly calculated) & rewired. They basically did the fastest & cheapest installation possible.

There is another way. Get to a C before the deadline, it gives 10 years life to a gas boiler set up.

Report Comment Reply

Have Your Say

Every day, landlords who want to influence policy and share real-world experience add their voice here. Your perspective helps keep the debate balanced.

Not a member yet? Join In Seconds