It seems hard to believe, but 2020 is nearly upon us.
It’s been an interesting, if largely uneventful, year in property, with uncertainty caused by the Brexit delay keeping property transactions in check and largely stalling growth across the country.
For Chelmsford landlords, there are some more key changes and amendments to letting legislation you should be aware of as 2020 hurtles into view.
Of course, 2019 has seen the introduction of several pieces of legislation, including:
- The tenant fees ban
- The Homes (Fitness for Habitation) Act
- Client Money Protection
- Proposals to scrap section 21
Looking ahead to 2020, as with any legislation, landlords who do things right and who are prepared have absolutely nothing to worry about.
But spending some time now looking at what’s around the corner in 2020 will definitely be some time well spent.
So, here are several pieces of legislation that landlords should expect next year…
Minimum Energy Efficiency Standards (MEES)
Yes, you’re right that MEES came into force back in April 2018.
That legislation saw properties with new tenancies issued after that date require a minimum Energy Performance Certificate (EPC) rating of E.
Now, from April 2020, the MEES will apply to all tenancies.
So, if you’re a landlord and your property (or properties) don’t meet that minimum E standard, you have some work to do to bring them up to scratch.
And with MEES predicted to tighten even further in the next couple of years, with a D rating suggested as a minimum, it will certainly pay to do any work required now rather than wait.
Electrical installation safety checks
Mandatory five-year electrical installation checks have been in place for Houses in Multiple Occupation (HMOs) for some time.
But in January the Ministry of Housing, Communities and Local Government confirmed that the checks would apply to all residential lettings in England.
This new rule was proposed to come in over a two-year period, with new tenancies subject to the regulations right away and existing tenancies a year later.
The date the regulations will be implemented, though, has yet to be confirmed, but landlords should expect something to happen on that front in 2020.
The end of mortgage interest tax relief
Section 24, as it’s more commonly known, has been filtering into the Private Rented Sector since 2017.
From April 2020, landlords will no longer be able to claim any tax relief on their mortgage interest, instead being able to claim a 20% tax credit.
While landlords in the standard tax bracket are unlikely to be affected, those in the higher band of tax could be.
Setting up your property portfolio in a limited company is one way of protecting yourself against Section 24, but there is nothing to say the rules won’t change in the future to include portfolios set up as companies, so landlords should keep a watching brief as we move through 2020.
Private residence relief
Currently, landlords can claim Private Residence Relief of 18 months when they come to sell a property they lived in prior to renting it out.
But from April, landlords will only be able to claim the time they lived in the property plus nine months.
Meanwhile, Capital Gains Tax bills will be due earlier, too, with deadlines for payment switching from January 31 in the year after the tax year of sale to with 30 days of a sale completing.
If you’re a Chelmsford landlord looking for advice on lettings legislation or property management services to take the weight off your shoulders, chat to one of the team at Martin & Co.