The last twelve months have been extremely tough for landlords. Many have been trying to work out how the phased changes to mortgage interest tax relief affect them personally whilst at the same time trying to rush through any last minute purchases prior to the increased Stamp Duty Land Tax for Buy-To-Let properties which was introduced in April.
Couple this with the uncertainty in the market that surrounded the European Referendum and you can’t blame landlords for missing some more minor items that will impact them in the future and which they need to start considering now.
Quarterly Digital Tax Returns
Over the next couple of years HMRC are taking steps to digitalise their records with the aim of allowing businesses and individuals to access all of their records in one place, a bit like an online bank account. One giant leap towards achieving this will happen from April 2018 when businesses, the self employed and importantly anyone who lets out property where it is their main source of income (or a secondary source of income above £10,000 and their main income is from employment or a pension) will need to make online returns quarterly.
Landlords need to start thinking about how this affects them and what provision they will need to make in order to comply. Does this mean that landlords will now need to engage their accountants every quarter leading to increased costs or is there a slim chance that this will make it easier for Landlords to compile their own returns. Whatever way it goes then landlords need to start to consider how this will impact them.
At City Lettings we can help by producing periodic (quarterly) statements for our landlords where we manage their properties and where we will hold details of their outgoings.
Minimum EPC Rating
There has been much criticism about Energy Performance Certificates (EPC) since they were first introduced with many landlords saying that they were a waste of time and that nobody takes any notice of them. Well love them or hate them, some landlords are now going to have to sit up and take notice and start to think ahead particularly if their EPC Rating is an F or a G.
From the 1st April 2018 there will be a requirement for any properties rented out in the private rented sector to ordinarily have a minimum EPC Rating of E. The regulations will come into force for new lets and renewals of tenancies with effect from 1st April 2018 and for all existing tenancies on 1st April 2020. It will be unlawful to rent a property which breaches the requirement for a minimum E rating, unless there is an applicable exemption. A civil penalty of up to £4,000 will be imposed for breaches.
If you have a property with an EPC Rating of an F or a G and would like advice on making improvements then please get in touch with City Lettings.
Electrical Safety Testing
Up until now the law on Landlord’s Gas Safety inspections has been crystal clear, yet the same can not be said for electrical safety testing. Is this all about to change with the Housing and Planning Act 2016 in which there is a provision to introduce standardised industry wide electrical testing. The Act states, “The Secretary of State may by regulations impose duties on a private landlord of residential premises in England for the purposes of ensuring that electrical safety standards are met during any period when the premises are occupied under a tenancy.” At present there is no clarity over what this testing may be and what the fines and punitive measures for non-compliance will be. At City Lettings we welcome this shake-up as the vagueness of the current legislation leaves too many gaps and leads to different interpretation. Surely it is simple to say that if you let your property you must have a specific inspection carried out by an electrician with a specific qualification at a specific frequency.
This is not a comprehensive list of the legislative changes that affect landlords which are in the pipeline but it demonstrates that whilst landlords don’t need a crystal ball just yet, they do need an advanced radar system to plan effectively.
If you want to stay in touch with the latest news follow us on Facebook & Twitter and keep an eye on our website for our latest blogs. In addition, there are some great legal helplines out there and if you engage an ARLA registered Letting Agent then they will be familiar with all of the current legislation.