To ensure that you are 'up to speed' with the changes coming into effect next year, I thought a quick peek into what is happening would be useful as we prepare for the New Year.
I doesn't seem that long ago that I was sharing with my audience that they needed to prepare for the Energy Act changes coming into effect from January 2018. It must've been at least a couple of years ago, but here we are now fast approaching the deadline! Just goes to show...time waits for no-one!
Here's a quick update on what is required from April next year...
The Energy Act 2018From 1st April 2018, new minimum standards for rental properties are being set. This means that it will be unlawful to let out a property with an EPC rating of F or G (the lowest current standard rating) and only those of E rating and above will be legally allowed to be let out.
It is crucial to ensure that your properties meet these new minimum standards to stay legal. If you don't, the consequences could mean a civil penalty of up to £4,000, unless there is an applicable exemption. For more details, visit...
Ensuring that the changes you make now meet these minimum criteria will pay dividends to you over the years. Landlords who do not have the funds to upgrade their properties will be forced to sell. If not, they will be deemed to be operating illegally.
The prescribed changes are being phased in over several years. I have included the details below to show what is set to happen:
April 2018 - ALL privately rented properties where NEW tenancies or leases are granted or renewed MUST have an EPC rating of 'E' or above - this applies to both domestic and non-domestic buildings (exclusions apply)
April 2020 - ALL privately rented DOMESTIC buildings MUST have an EPC with a rating of 'E' of above - meaning even buildings with tenancies which have NOT been renewed for many years (exclusions apply)
April 2023 - ALL privately rented NON-DOMESTIC buildings MUST have an EPC rating of 'E' or above (exclusions apply)
If you are unsure whether your property/ies currently fall within the 'F' or 'G' categories, it would be wise to have an EPC undertaken and if needed, get help to prepare a schedule of works to ensure that they meet the new requirements by the times as dictated above.
Landlord Tax ChangesAnother aspect to prepare for is the continued gradual phasing in of the new landlord tax regime. This is set to rise to affect 50% of rental revenue, also from April of next year. This will have a greater impact on landlords whose earnings are in the higher rate of tax and whose properties are owned in their own name/s.
If you haven't already, take the time to seek out the right tax advice on structuring your portfolio going forward. It could pay you dividends in future years.
Next month, watch out for my guide on how to get started or expand your portfolio in 2018. Knowing how to profit from uncertain times is one of the key aspects to building a successful property business.
In the meantime, I'd like to wish you and your family a wonderful festive season and I'll 'see' you again in the New Year. :-)
All the best,
Hazel de Kloe
Property Investor | Property Mentor | Speaker | Author
The contents of this article or for educational purposes only and we make no recommendations of any particular property purchase. The price of property can decrease as well as increase and you make any investments in property at your own risk.
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