Tax relief for rental home improvements – Lords committee suggestion

Tax relief for rental home improvements – Lords committee suggestion

11:45 AM, 4th April 2019, About 6 years ago 3

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Landlords are welcoming calls today by a parliamentary committee for tax incentives for private landlords to improve the quality of their property. The recommendation is made by a House of Lords committee looking at the regeneration of seaside towns and communities.

Following evidence provided by the Residential Landlords Association, the Committee’s report published today recommends: “The introduction of stronger incentives for private landlords to improve the quality and design of their properties. This might include tax relief for making improvements to properties.

The RLA has long argued that the Government should use taxation more positively to support the vast majority of landlords who do a good job and seek to do the best for their tenants. This has included the RLA’s call to make tax deductible any work a landlord carries out that is recommended on an Energy Performance Certificate to improve the energy efficiency of rented homes.

John Stewart, Policy Manager for the Residential Landlords Association, said:

“We welcome the recognition this report gives to supporting landlords to invest in raising the standard of housing for their tenants. We call on the Government to accept this proposal.”


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Colin Dartnell

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16:09 PM, 4th April 2019, About 6 years ago

'This has included the RLA’s call to make tax deductible any work a landlord carries out that is recommended on an Energy Performance Certificate to improve the energy efficiency of rented homes.'

Bit puzzled by this sentence, any work carried out is already tax deductable!?

Laura Delow

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7:54 AM, 6th April 2019, About 6 years ago

Reply to the comment left by Colin Dartnell at 04/04/2019 - 16:09
Revenue expenses are allowable, which include the day-to-day running costs of the property e.g. repairs & maintenance, but you can’t claim ‘capital’ expenses.
Expenses are generally ‘capital expenses’ if they will be used in the business over a longer period of time, such as when you:
- add something to the property that wasn’t there before
- alter, improve or upgrade something that was existing
- include the purchase of furnishings and equipment for the property
Capital expenses aren’t allowable and can’t be claimed against your rental income but you should keep records of them as you might be able to set them against Capital Gains Tax if you sell the property in the future.
Examples of capital expenses that would not normally be allowable:
- adding an extension
- installing a security system if there wasn’t one before
- replacing a kitchen with one of a higher specification
Your accountant will be able to better explain this & meanwhile suggest you read the official guidance; https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income#allowable-expenses

Colin Dartnell

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9:28 AM, 6th April 2019, About 6 years ago

Reply to the comment left by Laura Delow at 06/04/2019 - 07:54
Yes exactly, as I said works are already tax deductable wether it be yearly or against CGT when you sell it is still deductable, so not sure what the RLA is saying. Unless they want all improvments deductable as a yearly expense rather than at the sale date. The article at the top doesn't make that clear.

Personaly although I would prefer to get the deduction yearly, if I improve a property and can't claim till I sell, I have upgraded it. This should bring me higher rents and increase rentability anyway. I am also maintaining and increasing the value of my asset for the long term.

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