Challenging Times Ahead for Landlords

 

 

The number of landlords planning to reduce their residential portfolio has hit a 10-yearhigh, according to the National Landlords Association (NLA). Research by the NLA shows 20% of landlords are considering selling up after the Government announced a series of tax changes.

These include the restriction of mortgage interest tax relief for higher rate taxpayers, a 3% surcharge on additional property purchases and a ban on upfront letting fees for tenants.

Changes to tax relief on mortgage interest for residential properties were introduced on 6 April 2017 and, when fully implemented, will restrict tax relief to basic rate only (currently 20%). Before April 2017, landlords could deduct mortgage interest costs in full when calculating property profits. This change does not impact on commercial properties, which may result in landlords considering changing the sorts of property they own.

Further complications for landlords are likely to arise under the new Minimum Energy Efficiency Standards rules, which apply from 1 April 2018. After that date, it will be illegal to let a property with an Energy Performance Certificate rating lower than E to a new tenant, with this extended to all existing tenancies from April 2020. Penalties of up to £4,000 will be imposed for breaches.

Lentells are able to advise on all aspects of property tax. For further assistance please contact your local office.

Chard - Jane Jordan  01460 64441 jane.jordan@lentells.co.uk

Seaton - Mike Griffiths 01297 20584 michael.griffiths@lentells.co.uk

Taunton - Adrian Stallard 01823 286274 adrian.stallard@lentells.co.uk