Here is our round-up of some of the latest news and views from the world of property this week ….
Buy to let tax relief changes
At the start of the new tax year, Landlord Today, on the 10th of April, reminded owners of buy to let property that all tax relief on mortgage interest repayments has now been removed.
With each successive tax year since 2017, 25% of the tax relief that had originally been available has been steadily removed.
With effect from the current year, that relief has been replaced by a tax credit equivalent to 20% of a landlord’s mortgage interest repayments.
Those landlords paying income tax at the higher (40%) or additional (45%) rates, therefore, face a considerable increase in their tax liabilities.
Coronavirus and gas safety inspections
Social distancing, for the time being, is an essential precaution against the spread of the coronavirus.
In recognition of these exceptional circumstances, the National Residential Landlords’ Association (NRLA), on the 8th of April, suggested that landlords adopt a flexible and realistic approach to annual gas safety inspections of let property.
The NRLA emphasises that landlords are still bound to adhere to safety legislation requiring the issue each year of a certificate of inspection of any gas installation in their let properties. Inspections should be seen as essential works.
However, where tenants may be in self-isolation or when a visit to the property puts tradesmen, landlords or tenants at risk of infection, it may be necessary to record the need to postpone the inspection and arrange it for a suitable date in future.
The NRLA suggests that once landlords have made three unsuccessful attempts with tenants to arrange a gas safety inspection and decided to postpone it to a future date, the Health and Safety Executive is unlikely to prosecute the landlord for failing to conduct the inspection.
Home sellers beware!
If you are looking to sell your home during the current coronavirus emergency, beware scammers posing as buyers, warns a story in Property Reporter on the 9th of April.
Be on the lookout for people purporting to show an interest in buying your home – but instead out to mislead you for their own financial gain. The dangers of property fraud are greater than ever in the current climate, when your solicitors may be working reduced hours – or out of action altogether.
Some of the features of potential scams may be buyers promising unrealistically speedy completion dates, offers that are slashed to the minimum at the last minute, or buyers who simply disappear before the transaction is completed, leaving the seller in the lurch – and seriously out of pocket.
Steering clear of possible scams, therefore, means taking special care to check and verify the identity and bona fides of any potential buyer.
Calls for a stamp duty holiday
The coronavirus lockdown is in danger of bringing the entire housing market to a grinding halt. Kick-starting it once again, when the emergency is over, is likely to present still further challenges.
Although the slowdown in the market will also be accompanied by a fall in house prices, the Royal Institute of Chartered Surveyors (RICS) and the National Federation of Builders (NFB) are already calling for a further stimulus to revive the housing market once the worst of the coronavirus has passed.
As reported in Property Wire on the 10th of April, their proposal is for a short-term Stamp Duty holiday.
The NFB welcomes such a move because it would encourage the sale of new-build homes and, in so doing, boost the cashflow to struggling housebuilders.
While relief from Stamp Duty might indeed provide stimulus for the housing market, it is worth reiterating the circumstances in which the tax is payable. It is zero-rated on properties worth up to £125,000, 2% between £125,000 and £250,000, 5% on the next £675,000, 10% on the next £575,000, and 12% on properties valued at more than £1.5 million.
First-time buyers pay no Stamp Duty on a home costing up to £300,000 and a rate of only 5% on any purchase between £300,000 and £500,000.