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UK ‘ Buy to Let’ market in 2015

11th December 2015 By //  by Andrew Ross

 UK ‘Buy to let’ market in 2015

         What were the major changes? We summarise the main events:

 

  • In his Autumn Statement, George Osborne stated new measures would be introduced in April increasing the stamp duty(SDLT) by 3% on all property costing over £40,000 bought as an investment or second home. More of this is in our stamp duty article.
  • In his summer budget, tax relief for interest paid on buying an investment property for private landlords is to be restricted to the basic tax rate. This is to be phased in over 4 years from March 2017. From this date no higher rate relief will be available.
  • In addition there will no longer be the ‘10%wear and tear ‘allowance available for furnished lettings from April 2016.This was a simple and straightforward allowance used for many years. Instead all replacements of furniture will be dealt under the renewals basis.
  • The due date for capital gains tax on the sale of residential property will be accelerated so that it becomes payable within 30 days after completion (compared to 31st January following the end of the tax year). This takes effect from April 2019. This could present very real practical difficulties where there are multiple owner histories, unknown tax rates and overseas sales etc.
  • Proposals will be put into place over the next few years which will require landlords to prepare and submit records to HMRC much earlier than at present and in some cases pay tax earlier. This will put a greater degree of burden on the individual.
  • Deregulation Act 2015. A few highlights:You can’t serve a s 21 eviction notice if the property has outstanding repairs, you are sooner than 4 months into the tenancy, the deposit was not protected, you haven’t served the tenant with a ‘how to rent ‘booklet, you haven’ given the tenant a valid gas certificate. These changes take effect from October 2015.
  • Compulsory to make improvements at tenants request to upgrade the energy efficiency of the rental property to a minimum E level by April 2018 or you can’t let the property until the improvements are made.
  • Mandatory ID checks for all tenants. Onus is on the landlord to determine immigration status.

 

The end result will inevitably lead to higher rents to pay for these costs. There will be many who may now decide that the investment in rental properties is no longer for them.

 

Filed Under: news

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