Budget amendments to private rental sector
George Osborne’s latest and possibly final Budget threatened to create much interest for landlords. With the closest General Election for decades looming, there is an uncertainty in the property market.
Surprisingly, the Chancellor provided only limited changes for the private rented sector in his announcement. With this said, there was a proposal to scrap the annual tax return, in favour of people being able to pay their tax and submit returns online throughout the year.
Switchover
The switchover to the digital format is expected to begin in early 2016. As part of the changes, people will be permitted to pay their tax at any period during the financial year. Payment in installments will also be allowed.
Choosing to pay online will enable people to see exactly how HM Revenue and Customs calculate tax. In addition, people will be able to link software and bank accounts, eradicating the need to fill in an end-of-year return and having to pay a large bill all at once. If a person wishes to continue to complete an annual paper return, then the option will still be available.
The National Landlords Association are one of a number of industry organisations to welcome the move, saying that it will make things more efficient for landlords.
Additional changes
This year’s Budget also included some additional changes which could concern landlords. The Government’s failure to continue with their support for energy improvements after March 31st is disappointing given that new Energy Performance regulations have recently been outlined. The lack of support could see many landlords having to fund energy improvements out of their own pockets.
Furthermore, the Government has revealed plans to prevent private sector tenancy agreements to include clauses that prohibit the sub-letting of a residence. This means that landlords will not have full control over who is residing within their property. Landlords are also concerned that this rule will lead to complications with the recent terms of the Immigration Bill, which orders landlords to check to immigration status of their tenants. It remains unclear how these checks would be affected in the case of sub-letting.
Some experts have also predicted another buy-to-let boom, following changes to pension rules. Under the new legislation, people will be able to use money from their pension fund to invest in property.