Five changes for landlords to watch out for in 2019

February 13, 2019Categories: LandlordsTags: tax, regulations, legislation, Client Money Protection, EPC

With some legislation coming into force this year and other regulation being discussed, here are five changes for you to look out for:

 

1. Digital Tax (Making Tax Digital)

If your Buy to Let business turnover is above the VAT threshold (currently £85,000 per annum), from 1st April this year, you’ll have to keep records digitally and send them to HMRC via MTD-compliant software.

Although few people like such major changes to the tax system, this move can actually be of benefit:-

  • Real time digital tax records can help you capture more deductible expenditure and receipts
  • The information can help provide clarity on your profits, helping you to budget better and manage your cash flow
  • Records can be shared instantly with your finance and tax advisers
  • Rather than finding out your tax liability at the end of the year, you can secure estimates throughout the year of what you owe.

It’s essential to move to move to this new system, so if you aren’t sure what to do next, do contact your local tax office and they will be able to help guide you through the process.

 

2. The Homes Act

The Homes (Fitness for Human Habitation) Act 2018 which has been renamed ‘The Homes Act’ comes into force on the 20th March in England. The Act means that tenants won’t have to rely on the Local Authority to take up any complaints if they believe a property isn’t being well maintained – they can go straight to court.

Under the Deregulation Act 2015, as a landlord you have to respond to tenants’ complaints about a property’s condition within 14 days and make any necessary repairs in a reasonable timeframe.

For landlords that use our managed services, it’s unlikely this will make any difference as we always aim to work closely with you to ensure your properties are maintained and let legally and safely. However, if you have any properties that haven’t been checked by a property professional for some years, it might be worth contacting your local Your Move branch to ensure you are on the right side of the law.

The Act will of course require new tenancy agreements and as always, we will be updating ours to ensure it’s compliant. 

 

3. Minimum energy efficiency standards going up

Last year properties with an EPC rating below ‘E’ couldn’t be rented legally on a new tenancy and from April 2020, this will apply to existing tenancies.  If your rented property is currently rated ‘F’ or ‘G’ and you aren’t able to secure an exemption, it is worth considering upgrading your property sooner rather than later, especially bearing in mind the minimum rating is likely to rise to ‘D’ in 2022. See our full article here.

 

4. Public availability of the database of rogues landlords

The ‘rogues database’ that was introduced in April last year has been reported as ‘pointless’ because records were not available to tenants - the very people it was designed to protect. In response, the Government has announced that it will now be made public. It’s also possible that there will be further steps taken towards requiring all landlords to sign up to a redress scheme, something that was first pledged at the Conservative party conference in 2017. We’ll update you when we are aware of any new deadlines.

 

5. Client money protection (CMP) to become mandatory

The Government is currently assessing applications from potential Client MoneyProtection providers and will be law from 1st April 2019. This will mean all letting agents will have to insure their business for the loss of any landlord/tenant monies, including rent and maintenance funds. At Your Move, we have had Client Money Protection for many years.

As agents have to be able to demonstrate they have a financially sound business, it’s likely not all of them will be able to secure Client Money Protection – especially as the ban on tenant fees is imminent - and some may go out of business.

If you’re using any other agents to let properties, please make sure they currently have Client Money Protection or will be able to secure it as if they go bust, especially with the loss of tenant fees from on 1ST June 2019, they may take your rent with them, leaving you out of pocket. 

If you have any worries about the security of your rental income with other agents, do come and speak to us and we’ll be happy to help.

Client Money Protection

 

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Sources:

https://www.crunch.co.uk/knowledge/tax/making-tax-digital-what-is-it-and-does-it-affect-me/
https://listentotaxman.com/uk-tax/tax-guides/making-tax-digital-landlords.html