Latest News

TDS – How to reduce pet-related tenancy deposit disputes

27 November 2020

Sandy Bastin, Head of Adjudication Services at Tenancy Deposit Scheme (TDS), discusses the debate on whether owners and agents should allow tenants to keep pets in private rented properties given the spike in pet ownership since the Coronavirus pandemic began. Read More...

Consultation on Smoke and Carbon Monoxide Detectors

26 November 2020

The Government has opened a consultation on mandatory installation of smoke and carbon monoxide detectors in England. While the consultation, which closes on 11 January 2021, primarily focuses on social housing it also covers aspects of the private rented sector and is an opportunity to make the case for reform of existing regulations, where they could be improved. Read More...

Landlord Income Tax Relief fully phased in

Monday 06 April 2020

At the Summer Budget 2015, the then Chancellor George Osborne announced that the amount of Income Tax relief landlords can get on residential property finance costs will be restricted and gradually reduced from April 2017 until April 2020.

This means that from 6 April 2020 to 2021, 100 per cent of financing costs acquired by landlords will be given as a basic rate tax reduction. The final phase reduces the percentage of finance costs that can be deducted from rental income to 0 per cent and raises the percentage of basic rate tax reduction to 100 per cent.

As a result, from April, landlords will have to pay income tax on the full amount at the basic tax rate of 20 per cent. The rules affect UK residents who let residential properties in the UK or overseas as well as non-UK residents who let residential properties in the UK.

In his Budget speech, George Osborne said that the measures would, “create a more level playing field between those buying a home to let and those buying a home to live in”. Due to the changes, ARLA Propertymark has argued that the policy has pushed many landlords up a tax band, despite their income not increasing as tax is applied to turnover instead of profit.

Consequently, to cover these additional taxes many landlords have increased rents for new and existing tenancies. Many are also having to cut back on other expenses such as property maintenance. As the extra tax continues to mount up some landlords will sell up altogether and leave the sector. Over the long term this will impact on the value and quality of property available.

To support members, a Fact Sheet on the Restriction of Financial Costs is available in the member’s area. Login below.

Fact sheet