Britain’s buy-to-let market is constantly changing and evolving and landlords who want to get the most out of their investments need to keep on top of what’s new.
In recent years, changes to Stamp Duty Land Tax (SDLT), mortgage interest tax relief and more have had a huge impact on the market, but 2018 is quickly shaping up to be a busy year for buy-to-let, too.
Here are some of the key issues that landlords need to be aware of this year:
Mortgage interest tax relief cuts continue
Reforms introduced in 2015 will see the amount of mortgage interest tax relief landlords are entitled to claim slowly ‘cut’ each year.
During the last financial year (2017/18), landlords could deduct 75 per cent of their mortgage interest.
However, in 2018/19 this amount has been reduced to just 50 per cent – and will again fall to 25 per cent in 2019/20 until mortgage interest tax relief is eventually completely scrapped.
Three-year leases could be introduced
In recent weeks, the Government has unveiled plans to introduce three-year residential tenancies in England, which would require landlords to offer tenants three-year leases instead of 12 month leases.
If the proposals go ahead, tenants will receive a number of greater protections. Concerns have been raised that the proposed changes, therefore, could pose complications for landlords who are struggling to deal with problem tenants.
The Tenant Fees Bill could become law before the end of the year
The Tenant Fees Bill, which would prevent UK tenants from being required to pay residential letting fees when processing new tenant applications, will be reconsidered by parliament in the near future.
So far, the Bill appears to have received cross-party support – and commentators predict that it is likely to become law by late 2018 or early 2019.
If the Bill is passed, tenants will still need to pay rent, deposits and other default charges, but fees will only be allowed in instances where they are ‘capped’ and relate to the termination of a lease.
If you have any questions regarding your property tax, please get in touch.
Smailes Goldie Group
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