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Are They Making Landlords April Fools?

As we enter the month of April and a new tax year on April 6, there are a few changes which will come into effect and have an impact on landlords within the UK. These changes include:


Wear and Tear Allowance
Landlords who let furnished residential properties will now lose the wear and tear allowance as we know it. This allowance will be replaced with a new system from April 2016. The past allowance allows landlords to deduct 10% of their rental income in calculating taxable profit to allow for wear and tear. This allowance will now be replaced by a system allowing landlords to deduct only the actual costs incurred on replacing furnishings in the tax year. It will also enable all landlords of residential dwellings to deduct the costs they actually incur on replacing furnishings, appliances and kitchenware.

Further information can be found at the link below.
https://www.gov.uk/government/publications/reform-of-the-wear-and-tear-allowance/reform-of-the-wear-and-tear-allowance


Stamp Duty Surcharge
A little reminder. As informed in our February Newsletter, the stamp duty surcharge on buy-to-let properties and second homes will increase by 3%. This new increase will be in full effect from the April 1.


Rent a Room Relief

The Rent a Room Relief for householders with existing or those taking on new lodgers, will rise from £4,250 to £7,500 a year. This will provide for tax-free income that can be received from renting out a room/rooms in an individual’s only or main residential property. Those with a Rent a Room income greater than the previous level of £4,250, the measure will also reduce and simplify their tax and administrative burden. The increase allows the government to deliver the objective of supporting individual’s living standards.

Further information can be found at the link below.
https://www.gov.uk/government/publications/rent-a-room-relief-increase/increasing-rent-a-room-relief


Martin Brookes are one of the few agents within the North London area who let rooms and HMO properties. We have a strong clientele of potential tenants who are ready to move in and if this is something we can assist with. 


We Are Happy to Help!



In Other News!!!!


Buy-to-let landlords Facing Affordability Tests

There has been recent reports that The Bank of England have proposed landlords should face affordability tests and new limits on the amount they can borrow. The Bank of England would prefer for lenders to consider landlords wider financial situation instead of just their rental income. If the proposed rules are adopted, this can lead lending to landlords to be reduced by 20% over the next 3 years, as reported by BBC London, 29 March 2016. 

We will keep you updated with the latest news in regards to matter.


 

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