LANDLORDS: Legal changes that might affect you in 2020
We highlight the top 4 legal changes expected to affect landlords in 2020.
Minimum energy efficiency standards (MEES)
One piece of legislation that has already been announced involves new rules around Energy Performance Certificates.
Most Landlords are already familiar with the MEES that cam into effect in April 2018.
From 1 April 2020 landlords won’t be allowed to let out a private rented property – including existing tenancies – that don’t meet the minimum E rating.
So what does this mean? Under new legislation, properties with an EPC rating of F or G will not be suitable to be a rental property.
Electrical installation checks
It is expected that during 2020 there will be a confirmed date for when it will be mandatory for all private rented housing in England to have a five-year electrical installation check.
There is expected to be a two-year transitional period where in the first year all new private tenancies would be subject to inspections, while the second year would include existing tenancies as well.
In 2015, the Government made the decision to reduce the amount of tax relief that landlords could claim on mortgage interest payments and fees. Over the last five years they have been gradually phasing this out.
In 2020-21 landlords won’t be able to claim any tax relief on mortgage interest payments at all. From April 2020, landlords will receive a 20% credit on their interest payments instead.
Private Residence Relief
In the 2018 Autumn Budget, the UK government announced plans to make changes, effective from 6 April 2020, to principal private residence (PPR) relief from capital gains tax (CGT) – sometimes referred to as private residence relief (PRR) or main residence relief.
The changes will be particularly relevant for property owners who are currently letting out their old home.
There are two main changes taking effect from 6 April 2020:
- The final period exemption for PPR relief is to be reduced from 18 months to 9 months (note: special rules giving those with a disability, and those in care, a final period exemption of 36 months will still apply).
- Lettings relief will be restricted to situations where the owner was in shared occupation with the tenant.
At McFarlane we have a dedicated Lettings team. If you’d like to get in touch with them the please call 01793 611841