Property and capital allowances meet in an awkward place. The plant and machinery code excludes buildings and land outright, then admits a defined list of things inside a building back in as integral features, and a separate allowance covers the structure at a much lower rate. Understanding which of the three a given cost falls into is most of the work.
Three buckets, three answers
Plant fixed in the building, including the integral features list, gets plant and machinery allowances, relievable in full through the annual investment allowance or written down at 6% or 14%. The structure and fabric of a non-residential building gets structures and buildings allowances, a flat annual deduction over a long period on construction cost, which is far less valuable but better than nothing. Land itself gets no allowance at all, and neither does the cost of acquiring it.
Residential is largely outside all of it
Plant and machinery allowances are not available for a dwelling house, which is why capital allowances rarely help a residential landlord. Common parts of a block of flats can qualify, and furnished holiday lettings had their own treatment historically, but for the ordinary buy-to-let the answer is that the relief is the replacement of domestic items relief rather than capital allowances. This is the most common misunderstanding in this area and it is worth settling before paying anyone to look.
Where the value actually is
For a company that owns or occupies commercial premises, the value is concentrated in two events: buying the building, and spending money on it. A purchase carries an unclaimed pool of fixtures that may be worth a substantial share of the price if the entitlement conditions are met. A refurbishment produces an invoice that mixes qualifying and non-qualifying work in a single line. Both are worth a survey; ordinary annual maintenance is not, and is deducted as a repair anyway.
Questions people ask about property capital allowances
Can I claim capital allowances on a property?
Not on the land or on the building itself as plant, but on the qualifying plant and fixtures inside it, including the integral features. The structure of a non-residential building may qualify for structures and buildings allowances instead.
Do capital allowances apply to residential property?
Plant and machinery allowances are not available for a dwelling house, so an ordinary residential landlord is generally outside them. Common parts of a block can qualify.
What are structures and buildings allowances?
A separate allowance giving a flat annual deduction on the construction cost of non-residential structures and buildings, over a long period. It is much less valuable than plant and machinery allowances but covers costs those exclude.