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David Ebert LLP T/A Ackroyd Legal, which is authorised and regulated by the Solicitors Regulation Authority, SRA No. 558176 and is a LLP registered in England & Wales, Company No. OC362192;
Landlords could claim £27,000 stamp duty reimbursement after changes made to tax rules
HM Revenue and Customs have settled confusions on new rules in relation to stamp duty payments, landlords may be lucky enough to receive tens of thousands of pounds.
If you are an investor buying a ‘mixed-use’ building, (residential and commercial property in one building) you will no longer be forced to pay a three percentage point surcharge. This is generally exercised on purchases of buy-to-let properties and second homes.
It has come to the attention of the government that many landlords have paid in excess and could now claim around £27,000. This may now increase future purchases of mixed-use buildings.
Landlords included in this category can make a claim by getting in touch with the tax authority, according to Sean Randall, of Blick Rothenberg – a tax advisory firm. He went on to explain that HMRC updated their internal guidance manual, so as to ensure that the tax will be calculated without the use of surcharge, including for purchases made by companies.
Stamp duty has been coined as Britain’s most complicated tax, as there are different rates for the various types of purchases. There are also many loopholes that have been abused.
The first £150,000 for non-residential properties of the property’s value is taxed at zero. The next £100,000 is taxed at 2pc. Any value above £250,000 subject to a 5pc stamp duty rate. Landlords can now save £27,000. Landlords will be able to claim on multiple buildings when they purchase several properties. Instead of being taxed on the total £1.35m purchase price for residential properties, the total amount paid will be divided by the number of dwellings. Then they will work out the tax due and times it by four, which will reduce the tax bill.
If you have purchased a mixed-use property within the last 4 years, call our specialist legal team to find out whether we can help you reclaim stamp duty overpayments you may have made on 023 8047 7625 or email info@davidebert.co.uk
Listed Buildings
Listed buildings can look great, but behind the splendid high ceiling or under the quaint thatched roofs a property nightmare might be waiting. With a little know how, you can move into your dream home without a glitch.
Here are FIVE do’s and don’ts when thinking about buying a listed building:
DO
Get to know your VAT rights!
Some energy improvement work for renovation projects attracts VAT at only 5%. So always check before you pay any bills to see if you can reclaim on VAT.
Get the right insurance.
If the unexpected happens and any of the property suffers damage, your Conservation Officer will likely require you to repair the damage to a similar standard and with similar materials. This can become costly so it is well worth contacting specialist insurance companies who deal with listed buildings in advance of proceeding.
Get friends in high places.
It can never hurt to have friends in high places – especially if they are your local Conservation Officer. They will know about similar problems encountered by other property owners in the area and may be able to advise you on the property you have your eyes on.
Do your research.
It seems like an obvious point to make, but always check the previous work carried out on the property with your surveyor. Any unapproved work carried out on the property before you take ownership will become your problem, so you need to know what these are before proceeding.
Keep organised.
If you do any work on the property, keep all planning permissions and building control documentation safe, as you will need these when you sell your home in the future.
DONT
Always build to match!
We advise against combining modern repair methods with traditional methods. For example, dated properties will likely be built with old lime mortar, and using cement with this in situ can cause irreversible damage.
Keep it similar.
Always seek permission before removing, altering, or repairing original features. This can be anything from decorative stonework, fireplaces or windows as they are integral to the properties listing status. Permission needs to be obtained from the Local Authority and from freeholders where the property is leasehold.
Leave the stones alone!
Make sure stonework, chimney, flues are not painted or rendered.
It’s not just the building.
A lot of the time boundary walls and trees can be protected. So always get permission before altering or demolishing.
Take your time!
Always weigh up your options and listen to the professionals. A simple phone call to either your local Conservation Officer or to Historic England can clear up any questions you may have before you proceed.
A Few Changes for Landlords to Watch Out For in 2019
With some new legislation coming into force and other regulation being considered, here are a few changes landlords need to look out for this year:
1. The Homes Act
‘The Homes Act’ which was previously named The Homes (Fitness for Human Habitation) Act 2018, came into force on the 20th March 2019, in England. The Act gives tenants the freedom to go straight to court if they believe a property isn’t being maintained to the expected standard, cutting out them having to complain to the Local Authority.
Under the Deregulation Act 2015, a landlord has to respond to a tenants complaint regarding the condition of the property within 14 days and conduct any necessary repairs in a reasonable timeframe.
If you are a landlord and haven’t had your property checked by a professional for a while, it may be worth having your property checked out and ensure you are remaining on the right side of the law.
2. Digital Tax (Making Tax Digital)
A new, digital way of keeping your records is being introduced. From the 1st April, if your Buy to Let business turnover is above the VAT threshold (currently £85,000 per annum) you’ll have to keep records digitally and send them to HMRC via MTD-compliant software.
This could actually turn out to be of benefit to some people for a few reasons:
3. Public Availability of the Database of Rogues Landlords
The ‘rogues database’ that was introduced in April last year has been reported as ‘insufficient’ as records were not made available to the very people it was supposed to protect – the tenants. In response to this, it has now been announced that the Government will make it public. There may also be further steps taken towards ensuring all landlords sign up to a redress scheme, something that was first pledged at the Conservative party conference in 2017.
4. Minimum Energy Efficiency Standards Going Up
In 2018, properties with an EPC rating below ‘E’ were not permitted to be rented legally on a new tenancy and this will apply to existing tenancies from April 2020. You may want to consider upgrading your property sooner rather than later if your rented property is currently rated ‘F’ or ‘G’ and you aren’t able to secure an exemption, especially keeping in mind the minimum rating is likely to rise to ‘D’ in 2022.
5. Client Money Protection (CMP) to Become Mandatory
Applications from potential Client Money Protection providers have been assessed by the government and came into law on the 1st April 2019. This means all letting agents need to be insured for the loss of any tenant/landlords money, including rent and maintenance.
Some agents may go out of business as they need to able to prove they have a financially stable business, therefore it is likely not all of them will be able to obtain Client Money Protection.
Sources
https://www.crunch.co.uk/knowledge/tax/making-tax-digital-what-is-it-and-does-it-affect-me/
https://listentotaxman.com/uk-tax/tax-guides/making-tax-digital-landlords.html