Having a furnished property doesn’t affect your tax obligations as much as it used to. Until 2016, you could claim a ‘wear and tear’ allowance of 10% of your annual rental income. This has now been scrapped and superseded with ‘replacement relief’. This allows you to claim the cost of replacement items plus the costs of transporting and installing them. You can also claim the cost of disposing of the old item. However, replacement relief applies to both furnished and unfurnished properties, meaning owners of unfurnished properties can also claim the cost of replacing items such as white goods.
As mentioned earlier, furnished properties that are temporarily vacant don’t qualify for full council tax exemption. Depending on your local authority, you’ll have to pay between 50% and 100% council tax for the allowable void period.
For more information, see our landlord tax guide.