There’s a ton of legislation hitting the rental sector in 2020 – but these 5 are key. So read carefully and make sure you are prepared!
- Minimum Energy Efficiency Standards
Since 2018, it has been illegal to let property to new tenants unless it has a minimum energy efficiency rating of E. From April 1st 2020, the current MEES regulations will be extended to include existing tenancies. So If your rental property has a rating of F or G – it will be illegal to let it.
- Tenant Fees Act Extension
The Tenant Fees act also will be extended to include all existing tenancies – and this will take effect in June. “Deposits are already limited to a maximum of five weeks’ rent where the annual rent is below £50,000 for any new or replacement tenancy. If the annual rent is above this, the maximum is six weeks, with holding deposits limited to a week” say the RLA. “Where a banned fee has been taken, tenants will be able to get money back via the county court. Landlords could be fined up to £5,000 for a first offence, and £30,0000 for subsequent breaches.”
- Extension of the Homes (Fitness for Human Habitation) Act, in March:
The Fitness for Human Habitation Act states that landlords can be forced to carry out improvement works on a property or risk being sued for damages. This was introduced last year and is due to be extended on March 20th to include existing statutory periodic tenancies. Until then, it only applies to tenants who signed contracts on March 20th 2019 or after.
- Capital Gains Tax changes
There will be changes to CGT will take effect from April. Capital gains tax is currently paid on profits made on the sale of a property that isn’t your main home – and you are currently eligible to seek lettings relief if you once lived in the property that you now rent out. This will no longer be the case as of April. Unless you share your property wit your tenant – you will not be able to claim lettings relief. You will also have to pay the entire amount of CGT owed on any sale within a thirty day period, as opposed to the current situation where you have until the next tax year.
- New Tax Relief Rules
The gradual phasing out of tax relief that started in 2017 will be complete in April 2020. This means that as of April this year, you wont be able to claim any tax on interest payments. You will only be able to get a 20% tax credit on your interest payments – not the best news for those of you in the higher tax bracket.
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