As expert accountants and advisors to landlords, it is our job to stay on top of all of the latest changes in tax reform and regulations for the PRS. This article will be continuously updated with all the latest changes in tax and regulations for landlords.

October 2014- Mandatory redress scheme

All letting agents were required to join one of three government redressed schemes.

The redress schemes were introduced to provide consumers with free and impartial advice, with the aim of reaching independent resolutions between consumers and property agents.

May 2015- Compulsory fee disclosure

The Compulsory Fee Disclosure made it a legal requirement for letting agents to prominently display a list of fees at their offices and on their website. This was introduced to increase transparency with consumers.

October 2015- Carbon Monoxide detectors and smoke alarms

It became law for Smoke alarms to be installed on each floor of a property and for Carbon Monoxide detectors to be installed on every floor where there is a solid fuel-burning appliance. This increased safety for tenants.

February 2016- Right to Rent

It became a legal requirement for all. Landlords to do due diligence and ensure that all prospective tenants have the legal right to rent in the UK.

April 2016- Stamp duty surcharge

A 3% Stamp Duty on the purchase of second homes and buy to let properties was introduced. This means that landlords and prospective landlords have to pay a 3% charge on top of the existing stamp duty rates.

April 2016- Wear and Tear Allowance discontinued

Prior to April 2016, landlords were allowed to write off 10% of rental profits for notional wear and tear each year. This allowance was discontinued and replaced with a system where landlords could only claim actual wear and tear costs as they occurred.

January 2017- Tightening of buy-to-let mortgage criteria

The Bank of England Regulation Authority introduced a stress test that requires borrowers to show they could meet payments if the base interest increased significantly. This made it more difficult for landlords to gain mortgages.

April 2017- Buy-to-let Mortgage interest tax relief reduced

Buy-to-let mortgage interest tax relief was reduced to 25% until it reaches the basic rate of income tax (20%) in the 2020/21 tax year.

April 2018- Introduction of banning orders

In an effort to crack down on rogue agents, the government introduced banning orders for agents operating illegally. This means that the agents subject to banning order cannot earn income renting out housing or engaging in letting agency or property management work.

April 2018- Minimum Energy Efficiency Standards

Legislation to ensure no new tenancy is granted unless a property has a minimum Energy Performance Certificate rating of E

October 2018- Extended HMO landlord licensing

Expansion of mandatory HMO licencing scheme across England means that all Houses in Multiple Occupation (HMOs) occupied by five or more people have to be licensed throughout England.

October 2018- Introduction of minimum bedroom sizes 

Below are the minimum room sizes for HMO’s as introduced in October 2018.

·      One person aged over 10 years – room must be not less than 6.51 sqm

·      Two persons over 10 years – room must be not less than 10.22 sqm

·      One person aged under 10 years – room must be not less than 4.64 sqm

April 2019- Mandatory Client Money Protection scheme membership

It became mandatory for all property agents in England to be members of a client money protection scheme. This acts to ensure renters are protected should an agent use their client funds.

June 2019- Ban on upfront letting fees

A ban on fees for most private tenants, covering shorthold tenants, student lettings and lodgers living with a private landlord.

June 2019- Cap on Security and holding deposits

The Tenant Fees Act 2019 limits the amount a tenant can be charged for a holding or security deposit and defines what a tenant can be charged in addition to rent.

·     Holding deposits are capped at one week's rent

·     Security deposits are capped at 5 weeks rent where annual rent is less than £50,000.

·     For properties where annual rent exceeds £50,000 the Security deposit is capped at 6 weeks rent.

April 2019- Landlord Tax Relief

Landlords tax relief reduced to 25% interest under the old system and 20% tax credit under the new system (down from 50% for the 2018-19 tax year).

April 2020- CGT Rules Change for Buy-to-let landlords

Private Residence Relief (PRR) provides an exemption on Capital Gains Tax (CGT). Landlords could previously claim PPR for all the time they had lived in their property before letting it out to tenants, plus an extra 18 month after moving out. In April 2020, this time was reduced to the time the landlord lived in the property + 9 months only. Therefore, landlords have lost 9 months’ worth of CGT relief that they can claim when they come to sell.

March 2020- Evictions banned (COVID-19)

Due to the outbreak of Covid-19, the court service suspended all ongoing house possession actions.

June 2020- New Tenant Fee Ban

The TFB is extended to all tenancies in existence. Any term in the agreement that requires a prohibited payment is not binding. This applies equally to the first tenancies and renewal tenancies.

June 2020- Eviction suspension extended

Due to the Covid-19 outbreak, the eviction bill was extended until 23rd April 2020.

July 2020- Stamp duty Holiday for landlords

Stamp duty was removed from properties up to a value of £500,000 until 31st March 2021.

July 2020- Planning Rules relaxed for Landlords and developers

The usual requirement of full planning permission applications will no longer be required to demolish and rebuild unused buildings as home.

September 2020- Green Home Grant

Residential landlords can apply for a Green Grant voucher towards the cost of installing energy-efficient improvements to homes.

August 2020- Possession Claims Suspension Extended

The suspension on housing possession proceedings was further extended to 20th September 2020.

October 2020- New Light and Space PDRs for Landlords

New homes delivered through permitted development rights must meet minimum light and space standards.

November 2020- Evictions suspended until January 2021

Due to the Covid-19 outbreak, the eviction bill was extended until 11th January 2021.

January 2021- Leasehold reform

Leaseholders will be given the right to extend their lease by a maximum of 990 years at zero ground rent.