Upcoming deadlines for landlords
- Published: Wednesday 08 January, 2020
- Updated: Tuesday 05 May, 2020
- By: Nicola Eaton
There are a few key dates coming up for landlords at the start of 2020.
Self-assessment tax returns – January 31st
If you are already registered online to submit a self-assessment tax return, you will know that you need to get that done by January 31st, as HMRC do send reminders. But if you are not, please make sure you do not miss this deadline.
In the tax year 2018-2019 the mortgage interest tax relief dropped to 50%. If you are completing your self-assessment online there are instructions which reiterate this.
Minimum Energy Efficiency Standards – April 2020
The second one is further ahead on the horizon, April 2020, but potentially more of a challenge.
By April, all private rental properties must adhere to a Minimum Energy Efficiency Standard (MEES) of E.
It is important to understand the subtleties around this subject, where it comes to Houses of Multiple Occupation (HMOs).
Rooms within an HMO will be subject to the EPC rating for the whole property, and landlords should issue the EPC certificate for the building to each tenant.
If a tenant has not been issued with a valid EPC, then the landlord will not be able to issue a Section 21 notice, if the need to ever arose.
Listed buildings should have an EPC certificate, but if the rules and regulations around the listed status prevent works being done to meet a rating of E, an exemption may apply.
Private residence relief – April 2020
This issue is relevant to landlords who are letting out property they used to live in, who are intending to sell the property.
It relates to Capital Gains Tax (CGT).
Prior to April 2020, on sale of such a property, the landlord would receive tax relief for the time they lived in the property, plus 18 months after they moved out on their CGT bill.
Post April 2020, the extra 18 month’s relief period drops to an extra 9 months (the time the landlord lived in the property is still subject to relief).
The other change is to the bill payment deadline. Prior to April 2020, the deadline for paying Capital Gains Tax is the January 31st, following the tax year the property was sold in.
Post April 2020, Capital Gains Tax bills must be paid 30 days after completion of the property sale.
Any landlord considering selling property should seek legal and financial advice.
Government to publish pet-inclusive AST
The Conservatives have announced plans to revise their Assured Shorthold Tenancy model agreement, to include default wording which is inclusive of well-behaved pets.
Statistics from the Ministry of Housing, Communities and Local Government (MHCLG) highlighted that only around 7% of properties within the Private Rental Sector (PRS) are advertised as pet-friendly.
As a result, tenants with pets find it hard to secure accommodation.
It has been pointed out in the press that this move is a re-interpretation of Labour plans, which intended to go further on this point.
In 2018, Labour proposed that keeping pets should be allowable by default, unless there was evidence of the animal causing problems.
The Conservative’s new contract wording will be non-binding, meaning landlords are not obliged to use it. However, Mr Jenrick said that pets should only be refused, where the nature of the property makes it impractical to accommodate them.
Jenrick also highlighted the importance of supporting both responsible tenants and landlords on this issue:
“The government is clear there should be a balance with responsible pet owners not being penalised and landlords being more flexible in their approach, and it is right that landlords’ properties should be protected from damage by badly behaved pets.
“I’m overhauling our model tenancy contract to encourage more landlords to consider opening their doors to responsible pet owners.
“And we will be listening to tenants and landlords to see what more we can do to tackle this issue in a way that is fair to both.”
The fear for landlords is that housing pets can open up the risk of damage to a property. With the new cap on deposits, introduced in June last year, this risk cannot be mitigated by holding a higher or supplementary deposit amount.
Largest-ever landlord trade body launches
The National Residential Landlords Association has officially launched this month. The organisation aims to support private residential landlords, representing over 80,000 members, making it the largest ever trade body for the UK letting sector.
The new organisation has been introduced after the National Landlords Association (NLA) and the Residential Landlords Association (RLA) agreed to join forces in September last year.
The aim of the merge is to create a single unified organisation, with the intention to deliver a stronger voice for residential landlords within the private rented sector.
In September the NLA announced that the members of the newly merged organisation will “own and manage half a million properties, about 10 per cent of private sector”.
Chairs from the existing organisations, Alan Ward of the RLA and Adrian Jeakings of the NLA, explained in a joint statement that:
“After more than 20 years of friendly competition the time is right to create a single organisation to represent and campaign for landlords.
“With so much of our work done in parallel there are major benefits to be gained for our landlord members.
“We will be stronger together when presenting a unified voice to government both nationally and locally about the importance of supporting the majority of landlords who do a good job providing the homes to rent the country needs.”
Shortly after the merge was announced in September, Ben Beadle was appointed as the chief executive of the new the National Residential Landlords Association. The two previous chairs released a joint statement stating that:
“Ben has a depth and breadth of knowledge of private renting which will be a tremendous asset to our campaigning and members’ services”.
With the recent confirmation that Section 21 evictions are to stop, a key area of focus for the NRLA, may well be to ensure the government adequately upholds their promise to review and improve the Section 8 court process.
Funding for councils to tackle rogue landlords
Housing Secretary, Robert Jenrick announced, on Friday 3rd January, that £4m will be distributed across over 100 councils, to fund work to address criminal behaviour amongst landlords.
Within the sector, there has been much discussion around the need for further regulations. Many have said that the necessary legislation exists, but that councils simply do not have the resources to act.
For this reason, the new funding should be very welcome, but at under £40,000 per organisation, it will be interesting to understand whether this gives councils the financial support needed to tackle the task ahead.
David Smith, policy director for the Residential Landlords Association (now merged with the NLA to form the new NRLA) commented on this issue:
“Instead of offering inadequate and sporadic pots of money, it is critical that the Government provides proper, multi-year funding to enable councils to plan and prepare workable strategies to find the criminal landlords.
“This should be supported by councils having the political will to prioritise enforcement against the crooks rather than tying good landlords up in licensing schemes which do nothing to protect tenants.”
Referring to the powers councils have to take action against criminal landlords, Mr Jenrick said:
“The grants will support a range of projects to enable councils to make the best use of these powers. This will include trialling innovative ideas, sharing best practice and targeted enforcement where we know landlords shirk their responsibilities.”
The scale of the issue does not appear to be overwhelming, with statistics showing that 82% of private renters expressing satisfaction with their accommodation.
In Yorkshire and the Humberside region, over 100 enforcement officers will be trained to focus on maintaining industry standards.
Northampton Borough Council is setting up a ‘Special Operations Unit’ to tackle the worst landlords in the county.
Thurrock Council are using the funding for work with the care services to support vulnerable tenants and ensure they are housed in property of a suitable standard.
In Greenwich, a trial of new technology will identify properties which are particularly cold.
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.