It seems, with every year that passes, landlords are being hit with new legislation to get to grips with.
And as we move through 2020, that’s looking unlikely to change.
Here are 10 key things you need to know as a landlord in 2020…
1. Changes to mortgage interest tax relief
This one should come as no surprise to you as a landlord.
But 2020 is still a key year on the three-year journey that is the full implementation of the section 24 tax changes.
Tax relief on mortgage interest has been slowly phased out since 2017, but comes to a head in April this year.
From then, landlords will no longer be able to claim any tax relief on their buy-to-let mortgage interest.
Instead, you’ll have to subtract a flat 20% of your mortgage expenses when filling out your next tax return.
2. The Tenant Fees ban
As you should be well aware, the ban on tenant fees came into force last summer, meaning landlords and agents are no longer able to charge tenants a variety of fees.
As a landlord, you might only be experiencing the effects of the fees ban now, with agents potentially increasing their management fees to compensate for the ban.
You could also start facing additional charges for things like tenant referencing and inventories.
3. Changes to section 21 eviction rules
This first reared its head at the end of 2019 with the government proposing to end ‘no fault’ evictions in England.
The proposed legislation to remove section 21 evictions, where landlords can give two months’ notice to tenants at the end of a fixed term tenancy or a rolling tenancy, is set to be debated this year.
As a landlord, this would mean having to use a section 8 eviction to remove a tenant that breaches their tenancy agreement, rather than the simpler section 21 process.
4. HMO licensing
While mandatory rules around Houses in Multiple Occupation (HMOs) are set to remain the same, local licensing remains confusing.
Around 60 local authorities in England run ‘additional’ licensing schemes when it comes to HMOs, but it’s not always a clear requirement with some councils.
That has led to confusion among HMO landlords in some areas and some delays in processing.
5. Private residence relief
Currently, you can claim up to £40,000 in capital gains tax relief when you sell a rental property that has previously been your main home.
But from April, this will no longer be the case.
In order to claim the capital gains relief, you’ll need to live in the property alongside your tenant at the point of sale.
6. Minimum Energy Efficiency Standards (MEES)
Like landlord tax relief, this one should come as no surprise.
Minimum Energy Efficiency Standards (MEES) were brought in in 2018 and meant that rental properties with an Energy Performance Cerificate (EPC) rating of below E could no longer legally be let.
That applied to all new tenancies after April 2018.
From April 2020, however, the rules will apply to ALL tenancies.
So, if your rental property is not up to scratch energy-wise, you’ll need to move quickly.
7. Mandatory electrical checks
Mandatory electrical checks every five years have been in place in HMOs for some years.
But now it’s likely these rules will filter down to all residential tenancies.
The new rules could come into place in 2020, but so far the government hasn’t confirmed a start-date.
8. The rogue landlord database
We’re sure you’ll agree, a database of rogue landlords, who make life so difficult for professional landlords, can only be a good thing.
However, since the government’s launch of the database, it has failed to make any kind of impact with only a handful of names added to the list.
Last year, the government said it would open up the database for tenants to view but this is yet to happen and responses to proposals to reform it are still being considered.
9. Stamp duty
Along with mortgage interest tax relief changes, the additional 3% Stamp Duty charge placed on landlords back in 2016 has been a major change for investors to endure.
Latest suggestions are that an additional surcharge could be placed on foreign investors at some point during 2020, so landlords from overseas should keep an eye out.
10. Leasehold reform
The government has long promised to clamp down on unfair leasehold charges like ground rent increases and permission fees.
This could all come into force this year, with the banning of leasehold houses and caps on service charges, permission fees and ground rent.
Landlords looking to invest or expand their rental portfolios should keep their ears to the ground on this one.
If you have any questions on the above information, or anything else to do with renting out your property, get in touch with your local Whitegates branch for some helpful buy-to-let advice.