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What Does 2023 Have in Store for Landlords?

  • 1 year ago
What Does 2023 Have in Store for Landlords?

There are a lot of changes in the pipeline for the UK’s landlords, with new legislation and changes to tax bills coming into play later this year. Forewarned is forearmed when it comes to letting out properties (as it is in many other cases…) so here are the main things you need to get ready for in 2023 if you’re a landlord.

New laws offering tenants more protection

In an attempt to “redress the balance” between tenants and landlords, the government is making some changes to the rental system in England.
No-fault evictions are to be banned under the Renters’ Reform Bill and tenants will have more powers to challenge landlords who don’t meet their obligations.

Other changes prevent landlords from setting blanket bans on families, tenants with pets and tenants in receipt of benefits.
Landlords will also have to double the notice periods for rent increases and tenants can challenge unjustified or excessive rises.

As yet, there’s no exact date for these new laws but we do know they’ll be coming into force sometime in 2023.

Cuts to capital gains tax allowance

From April, the tax-free allowance for landlords selling properties will be reduced so this may mean a bigger CGT bill if you sell at any time after then.

At present, the CGT allowance is £12,300 on the profits from selling an asset before CGT kicks in, but this is set to reduce to £6,000 in April 2023 and to reduce to £3,000 in April 2024.

Energy efficiency rule changes incoming

The government is still keen to improve energy efficiency in the UK’s housing stock, especially in the rental sector. At present, rented properties must have an Energy Performance Certificate (EPC) of E or above.
By 2025, however all new tenancies must be in properties with an EPC of at least C, with existing tenancies catching up with this by 2028.

The same new legal requirements are also increasing the cap on the amount landlords are expected to invest on improving their EPCs. At present this cap is £3,500 and it’s set to rise to £10,000. As many rental properties have EPCs lower than C, that’s a lot of work to be done to pass muster.

Help to invest in energy efficiency incoming as well

As so many rental homes need improvements to reach an EPC of C – some estimates say 50% or so – lots of landlords will need some help and the government has announced some.
The £1 billion ECO Plus Scheme offers homeowners up to £1,500 to help with the costs of insulating their properties. This scheme will run until April 2026 and is geared primarily to homeowners in lower council tax bands, but some landlords may also be eligible for this funding.

More time to transfer to quarterly tax returns

There have been many calls for a delay to the introduction of the compulsory HMRC Making Tax Digital scheme and these have been answered. This gives landlords more time to adjust to the new way of reporting their income tax.

The government wants landlords making more than £50,000 a year to use new software to keep their records and this new digital tax scheme was set to start in April 2023, but it’s been pushed back to April 2026. Once in force, the scheme requires quarterly rather than annual tax returns.

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