13:43 PM, 22nd November 2017, About 7 years ago 41
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The key headlines affecting UK landlords are:-
RESTRICTIONS ON FINANCE COST RELIEF
Disappointingly, there where no amendments suggested to the legislation which restricts finance cost relief for private landlords under Section 24 of the Finance (No.2) Act 2015, which remains in place and will continue to be phased in until the 2020/21 tax year, at which time no finance costs will be able to be offset against rental income. The 20% tax credit for disallowed finance costs was also unchanged and there was no extension of the restrictions to Limited companies. There were no changes to incorporation relief or SDLT relief for partnership incorporation. Whether this will result in more landlords incorporating their businesses remains to be seen.
Show Book a Tax Planning ConsultationPERSONAL ALLOWANCES INCREASED FROM APRIL 2018
Nil rate income tax band to increase to £11,850
Basic rate income tax band increased to £46,300
INDEXATION ALLOWANCE FOR COMPANIES
This will be frozen from January 2018.
CORPORATION TAX
The trend of reducing corporation tax is confirmed. It was 20% last year, 19% this year and is scheduled to reduce to 18% next year and 17% the year after. No change in this regard.
EMPTY PROPERTIES
Councils to be granted the right to charge a 100% Council Tax premium on empty properties.
STAMP DUTY LAND TAX
SDLT abolished for all First Time Buyer purchases up to £300,000
FTB purchases up to £500,000 maximum will also be free of SDLT for the first £300,000.
HOUSE BUILDING
£44 billion in government support, including loan guarantees announced to target building 300,000 new homes a year by the mid 2020s.
These funds include an extra £2.7bn to more than double the Housing Infrastructure Fund.
Compulsory purchase of land banked by developers for financial reasons
A review of the gap between planning permissions being granted and housing building starting. It will report for next Spring’s economic statement.
The Chancellor said: “Solving the housing challenge takes more than money.” He wants to look at planning reform focusing on the urban areas where “people want to live and where most jobs are created. In particular, building high quality, high density homes in city centres and around transport hubs.”
5 new garden towns to be announced.
LONGER TERM TENANCIES CONSULTATION
The Chancellor announced a consultation in regards to encouraging landlords to offer longer term tenancies. Wouldn’t it be great if we could persuade Government to make s24 concessions for landlords who offer a 5 year Deed of Assurance? Note that Deed of Assurance doesn’t affect mortgage lending but longer term tenancies does.
UNIVERSAL CREDIT CHANGES
Government to remove the 7 day waiting period at the start of a new UC claim
One month’s payment advance will be possible for cases of hardship after a minimum of 5 days.
VAT THRESHOLD
Despite threats to bring this down the threshold of when trading businesses, such as letting agents, have to register for VAT will not change for 2 years at £85,000.
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Sign Up14:53 PM, 22nd November 2017, About 7 years ago
I have a prop that is very difficult to let, even to benefit claimants, despite being newly refurbed, double glazed and centrally heated. The reason is that the council has completely failed to tackle the antisocial behaviour in the area, made worse by their having shifted the bad tenants from another area which got Selective Licensing earlier. So now I have the joys of Selective Licensing at £500-odd, double council tax and no income. Oh joy, oh rapture.
Andy Graham
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Sign Up15:15 PM, 22nd November 2017, About 7 years ago
Reply to the comment left by Mark Alexander at 22/11/2017 - 14:00
Mark, are you interperating the new premium council tax on empty properties as being affective on properties undergoing refurbs too? This would be several hundred pounds at any time for us and is very disappointing, it's like financially penalising a landlord for wanting to improve the standard of accommodation.
Alex Russell
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Sign Up15:19 PM, 22nd November 2017, About 7 years ago
Reply to the comment left by Gary Dully at 22/11/2017 - 14:07
Gary, I was just thinking the same. I thought that law was changed years ago. I have had to pay council tax from day one in Liverpool, Torquay and Bristol. Maybe it only matters if it affects London!
Luke P
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Sign Up15:22 PM, 22nd November 2017, About 7 years ago
Many LAs charge C.Tax from day one, but the question here is whether the 100% premium (so double the normal amount/200%) from day one. The old 150% charge only applied after being stood empty for two years.
Mark Alexander - Founder of Property118
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Sign Up15:25 PM, 22nd November 2017, About 7 years ago
Reply to the comment left by Andy Graham at 22/11/2017 - 15:15
Hi Andy
Yes, that the way it came across to me. On this occasion I hope to be proven wrong when we see the detail.
Terence Birch
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Sign Up15:43 PM, 22nd November 2017, About 7 years ago
I was once contacted by Bailiffs who had been instructed to enforce a court order against me. It seems that Manchester City Council had taken me to Court for non payment of Council Tax on a rental property that I own. Unfortunately the summons was served not at the rental property but at a home address that I had lived at 4 years earlier so I was unable to respond.
All of this might seem reasonable you think - until you realise the claim was for 100% of the Council Tax for an alleged one day void totalling ........£1.70!
I appealed the case successfully as they had miscalculated and no Council Tax was in fact due.
Not quite sure how much that fiasco cost the genuine Council Tax payers of Manchester.
Jilly G
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Sign Up15:44 PM, 22nd November 2017, About 7 years ago
Re empty properties:
The lovely Lambeth Council charges a day's council tax for the day the tenant moves out. Even though I had no void this time, new tenants moved in the next day, I'm being chased for money. The check-out report was at 16.00. I'm prepared to pay 1/3 of a day but not the whole. My agent says it's a waste of time negotiating. Beware!
Simon Hall
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Sign Up15:45 PM, 22nd November 2017, About 7 years ago
The Chancellor may have inadvertently reduced Buy To Let Stamp Duty accordingly. Here's why I think:
As we pay 3% surcharge over and above normal Stamp Duty. Therefore on house purchase valued at £250000, first time buyer would have been required to pay £2500. i.e: up to £125000 Nil and then on remaining £125000 X 2% therefore total charge would have equated to £2500. The Buy To Let investor would have paid an additional surcharge of £7500 i.e £250000 X3% = £7500 + aforementioned charge = £10k in total.
Now in the circumstances when first time buyers are not required to pay anything up to £300000 therefore on purchase price of £250000 there is ought to be saving of £2500 for Buy To let purchase. Any views will be welcomed.
Simon Hall
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Sign Up16:01 PM, 22nd November 2017, About 7 years ago
The Chancellor has also frozen Indexation on Capital Gains on Incorporated Landlords which is likely to cost thousands to Incorporated Landlords. Details in Link:
http://www.telegraph.co.uk/money/consumer-affairs/budget-2017-buy-to-let-investors-face-higher-taxes-capital-gains/
David Lawrenson
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Sign Up16:13 PM, 22nd November 2017, About 7 years ago
Reply to the comment left by Jilly G at 22/11/2017 - 15:44It's the same for Southwark in London too.
I wouldn't be surprised if they double dip... i.e. charge the tenant council tax for the day they move out as well as us landlords for that day too.
Maybe something for someone with time on their hands to look at?
Kind regards
David Lawrenson
http://www.LettingFocus.com
PS I have to say I think you guys are "Whistling Dixie" if you expect the government to repeal S24. Fight battles that can be won. For the time being that boat has long since sailed. When they have reduced the size of the PRS back down to 8% as a result of their relentless tax attacks and over-regulation, fighting S24 may get some traction. Not till then