Redstones Lettings

Landlord update: new Government proposals underway

There are a number of developments at the Government level that are likely to impact private sector landlords. These include:

Tax Relief
The level of tax relief available for landlords is changing, as announced in the recent budget. It’s proposed that buy-to-let mortgage tax relief should be capped at the basic tax rate of 20%.

This is causing much debate, as some people feel it would drive rents up and price landlords out of the market. Opinion is split as to the fairness of this proposal. Some people feel that landlords should consider renting their property as a business, in which case they should be taxed. Others state that homeowners cannot claim tax relief on their mortgage payments – so should landlords be able to?

Wear and Tear Consultation
Tax relief changes have been proposed for the wear and tear of furniture and fittings. Restricted to fully furnished properties, landlords can currently claim a wear and tear allowance of 10% of rent received, regardless of the costs.

This had meant that some landlords were gaining relief despite making no expenditure, whilst landlords who spent above the 10% level are limited in terms of the relief they can claim.

New proposals will allow all landlords to claim a deduction for the cost of replacing furniture and furnishings, as well as appliances and kitchenware.

Please note that the tax relief available will be for replacing existing furniture and not for furnishing property in the first instance.

Right to Rent
Right to Rent, where it is the responsibility of landlords and lettings agents to perform checks that ensure a tenant has the right to be in the country was recently trialled in the West Midlands. Although the results of the trial haven’t been released, the Government plans to expand the scheme throughout the UK.

What do you think about these recent proposals? Get in touch via social media and let us know.