1) Wear and Tear Allowance replaced with Tax Relief
It was announced in last year’s summer budget that the government would be scrapping the landlord’s wear and tear allowance from April this year. Basically, this means the 10 per cent allowance that covered the cost of replacing things like beds, carpets and furniture will be replaced with tax relief.
This will allow you to deduct the cost of replacing furnishings, but the initial cost of furnishing your property will be excluded. You can prepare for this change by planning ahead and saving towards a property maintenance fund.
2) Right to Rent scheme extended nationwide
As part of the government’s Right to Rent scheme, you must now check that any new tenant or lodger can legally rent your property. You could be fined up to £3,000 per tenant if you’re found to be renting to someone who isn’t allowed to rent property in England.
Within 28 days of someone starting a new tenancy in your property, you must make checks for any adults living in your property, regardless of whether they’re in the tenancy agreement or not.
3) Energy efficiency must be improved in rented properties
New rules announced last year will ban landlords from renting out homes that don’t meet certain energy efficiency criteria from 2018. Under the new legislation, you will need to make sure all rental properties are at least ‘Band E’ in energy efficiency standards.
While this law doesn’t come into place until 2018, from April tenants can request consent from landlords for improvements to make homes more energy efficient. Landlords will have access to financial support from schemes like the Green Deal and Energy Company Obligations to help make these improvements.
4) Smoke and carbon monoxide alarms must be installed and checked
The Smoke and Carbon Monoxide Alarm Regulations 2015 came into force last year, and requires you to install and check smoke and carbon monoxide alarms.
If you don’t install an alarm you’ll receive a remedial notice from the council giving you 28 days to carry out the work. After these 28 days, you could be issued a £5,000 fixed penalty charge if you still haven’t installed one.
5) Important changes to Section 21
Finally, the government announced a number of important changes to Section 21 notices that all landlords need to be aware of. For example, landlords will be prohibited from serving a Section 21 for a set period after the service of a Housing Health and Safety Rating System (HHSRS) notice or request by a tenant for repairs.
There will also be time limits for when a Section 21 can be served after a new tenancy has been granted, as well as a ‘use it or lose it’ provision after the service of a Section 21.
Visit the government website to find out more about Section 21 notices.
Are you anticipating big changes in your buy-to-let business in 2016? What are you doing to prepare? Let us know on Twitter.