With several major legislative reforms due to come into force, 2023 is set to be another eventful year for buy-to-let (BTL) landlords. What do they need to know about?
Renters Reform Bill
Of the scheduled legislative changes, it is the Renters Reform Bill that is causing most discussion (and disquiet) among landlords. Seen by many as the biggest overhaul of the private rented sector in decades, the bill proposes, among other things, to:
– End section 21 evictions
– Ban tenant notice periods of longer than two months
– Prevent blanket tenant bans
– Create a new landlord ombudsman and property portal
New EPC requirements
Another big upcoming change is an update to the rules on Minimum Energy Efficiency Standard (MEES) for privately rented homes in England and Wales. Currently, the MEES is an Energy Performance Certificate (EPC) rating of ‘E’. From 2025, though, the bar will be raised to a minimum of a ‘C’, with new tenancies affected immediately and the rules applying to all tenancies from 2028.
Capital Gains Tax
For landlords seeking to escape the new legislation by selling up, Capital Gains Tax (CGT) needs to be another consideration. Simply put, in most cases you’ll need to pay CGT if you sell a rental property for more than you paid for it. Currently, the tax-free allowance is £6,000 per person (reduced from £12,300 for 2022-23), falling to £3,000 from April 2024.
Licensing and tax
Local authorities have been broadening their rules in recent years to include standard, single-tenancy BTLs within the requirements for landlord licencing. Another upcoming administrative task is the introduction of Making Tax Digital. This had been due to start for landlords from April 2023 but has now been delayed until 2026. When it does come into force, landlords with an annual rental income above £50,000 will need to file digital tax returns once a quarter rather than annually.
Finger on the pulse
With so much happening (and scheduled to happen), we’re here to help you make sense of it all. We can help make sure your property portfolio is well prepared for years to come.
🚨 Data accurate as of the date of publication – 27.06.2023
🚨Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
🚨 The above material is for informational purposes only and does not constitute a sales offer or financial advice. Before taking out any insurance, credit agreement or other financial product, you should obtain individual advice on your requirements and the general terms of the contract.
Source: Quilter Financial Planning – Essentially Mortgages Q2 2023
