Legislation Changes of 2022 That Landlords Need to Know About
If you’re a professional or a complete newcomer to the market - be aware that changes are coming to how landlords are supposed to handle business in 2022. Let’s cover them in the points ahead:
Changes in Tax Returns
The deadline for your 2020-2021 self-assessment passed on January 31st, but it is just one where a new mortgage interest tax relief credit applies going forward. The rules introduced in April mean you may get higher tax bills this year. The changes mean that you will no longer have the ability to deduct mortgage expenses from your rental income. This may be a serious change, as it was a major advantage regarding taxes for many UK citizens. You will now be issued a tax credit based on a 20% rate of your mortgage interest payments instead.
Changes in Capital Gains Tax
This is another chance for landlords in 2022 you should be aware of. It is meant to help taxpayers with meeting deadlines and mitigating the risks of late payments. Although you originally had 30 days to report and pay your capital gains tax, this has been extended to 60 days instead. If you are about to sell a buy-to-let home or your second property, you may have to pay this tax on the profits you make. The rates will be between 18-and 28%, depending on the bracket the home falls into.
Changes to Energy Efficiency Rules
The new government rules being placed mean you will have until 2026 to ensure your newly let homes will achieve band C or more on their energy performance certifications. You will have more chances to get the perfect property, making the necessary refurbishments and changes to make it happen.
You may need to do more work on older properties, as they will need to meet regulations. Double glazing and insulation may need to be up to standards, as well as other details. Though it may cost you more in the long run, thankfully you will have more time to get things done, spreading the expenses over a longer period.
Changes to Section 21 Evictions
As one of the most awaited changes in how landlords do business, the abolition of section 21 is here. It means you won’t have the right to evict a tenant on short notice and without a viable reason. Renters need that protection since it allows them to fight and avoid unfair evictions from their homes by landlords who may be doing so based on prejudice or similar reasons. The no-fault evictions of the past meant that tenants had to be asked to leave in as short a time as 8 weeks for any reason at all, or none. This left renters feeling worried about the stability of their homes, but with the new legislation in place, they can feel safer in their tenancy agreements.
Changes in Lifetime Deposits for Tenants
Every time a tenant moves to a new rental property, they will need another deposit to secure tenancy, with the hope it will be released from their previous home. Although paying rent and other expenses at the same time, this may be something hard to scrounge for some people. To avoid such situations, a lifetime deposit allows their money to be transferred directly from one landlord to another with every move. It’s meant to simplify the process, as well as address the potential abuse of these deposits. Tenants won’t have to worry about finding the funds for a new deposit each time, and they can focus on a more straightforward renting process.
