2019 is a year of change for all landlords in the UK. With the changes to Section 24 tax relief coming into force, some Landlords have started to feel the pinch which is compounded by new legislation on rental property. We have tried to summarise the changes that will impact most landlords this year along with some recommendation on how to minimise the impact.
- Making Tax Digital – If your annual business turnover is above the VAT threshold from 1st April 2019 you are required to store your records digitally and send them to HMRC via a compliant software such as Xero, Quickbooks, Sage etc. Initially this will feel like a pain but once the hard work is done in formatting the software, most systems have the ability to set rules to recognise transactions and allocate to the correct property. Additionally most pieces of software allow the user to take a picture of an expense receipt and upload it to a portal which removes the need to keep the receipt and reduces the chance of misplacing expenses. Finally this will enable you to see a real time view on cash flow to identify any periods where cash flow is tight or under performing properties by generating property and business analysis reports.
- Fitness for Habitation Bill – on 20th March 2019 the Homes (Fitness for Human Habitation) Act 2018 came into force in England to make sure that rented houses and flats are ‘fit for human habitation’, which means that they are safe, healthy and free from things that could cause serious harm. Most landlords make sure that the houses and flats they rent out are safe and secure, warm and dry. But some landlords do not, and this means that some tenants live in dangerous or unhealthy conditions. This new law, the Homes (Fitness for Human Habitation) Act 2018, will help these tenants and make sure irresponsible landlords improve their properties or leave the business. If rented houses and flats are not ‘fit for human habitation’, tenants can take their landlords to court. The court can make the landlord carry out repairs or put right health and safety problems. The court can also make the landlord pay compensation to the tenant.
- Changing Energy Efficiency Standards – From 1st April 2018 it became law that a property could not be let to a new tenant unless the EPC energy rating was “E” or above. From April 2020, this will also apply to properties with existing tenancies. This will mean that any properties that are currently tenanted with EPC ratings of “F” or “G” will need to be brought up to a minimum standard of “E” by April 2020. We would recommend that landlords scheduling improvements consider that in 2022 the minimum rating is likely to rise to “D” so it may be better to work towards this so improvements can be completed at one time.
If you would like any further details on any of these topics or would like to discuss how Hanna Properties could support you on your property journey please do not hesitate to contact a member of the team