I don’t usually like to go into legislation changes and the like too often on this blog, but I have been asked by a few existing Landlords over the last 10 days or so about the changes to Wear and Tear Allowances for residential Landlords from April 2016.  So I thought I would give you a brief overview of the impending changes.

The current Wear and Tear Allowance allows Landlords to reduce the tax they pay on rental profits by 10% regardless of whether they have actually replaced any of the furnishings in their rental property in that tax year.  This is set to be replaced on 6 April 2016 and Landlords will only be able to deduct the costs that are actually incurred when replacing furnishings in the rental properties.

The good news is that all Landlords of residential dwelling houses, no matter what the level of furnishing, are eligible for the allowance.  This differs from the existing allowance which only applies to fully furnished properties.

Landlords will be able to claim for the cost of replacing furniture, furnishings, appliances and kitchenware provided for the tenant’s use.  However ‘betterment’ or improvements to the existing furnishings will not be permitted.  For example, replacing a washing machine with a washer-dryer is an improvement so you would only be entitled to claim for the cost of a washing machine.

The new allowance will not apply to the cost of furnishing a rental property for the first time after purchase and will only cover the replacement of existing furnishings.  The only exclusions are furnished holiday lets and commercial properties.

If you’re thinking of changing any furnishings or appliances in your property that don’t urgently need doing before April is to sit tight until after the changes when the costs become deductible.

If you would like some free advice on how the new Wear and Tear Allowance will affect you please give me a call on 01489 570011 or drop me a line at james.hill@brooklettings.co.uk.

To keep up to date on the property market in Locks Heath and Park Gate and receive impartial Buy-To-Let deals and advice read The Locks Heath Property Blog.

One question that I get asked from time to time by Landlords is:

“Do I need an Inventory?”

My answer is always a resounding yes!

“But there’s not a lot in my property, it is unfurnished……”

I realise that there is enough to pay for out of your first month’s income and the Inventory and Check In Report just sound like more expense.  But they could be the most important documents you own when it comes to the end of the tenancy.  And even if you are leaving your property unfurnished you still need them.  This is why….

Your Tenant vacates your property and you are not happy with the condition it has been left in.  The carpets and the rest of the property need cleaning.  Naturally you want to do something about it and deduct some money from the Tenant’s deposit.  You have the receipts for the work carried out but without an Inventory and Check In Report you have no proof of the condition of the property when the Tenant moved in.  The result?  The deposit gets returned to the Tenant in full and you are left with a dent in your pocket.

The law relating to Tenants’ deposits changed on 6 April 2007 and from this date all deposits taken for an Assured Shorthold Tenancy must be protected by a Government recognised deposit protection scheme.

At the end of the tenancy the scheme will only allow the deposit to be released when the Landlord and Tenant have agreed for it to be.  Which is great if the Tenant has left everything beautifully but if they don’t and you can’t agree on deductions it is you that will lose out.

If you can’t reach agreement, the schemes’ adjudicators will settle your dispute but without adequate evidence you sadly won’t be entitled to a penny.

Landlords only make the mistake of not preparing an Inventory once – when they have lost out financially.  Don’t let this happen to you.

#inventory #checkin #property #landlord #tenant #dilapidations

Is your investment property ready for winter?
So, your property has run like clockwork all year without having any calls from your Tenant for maintenance. But you can guarantee that something will happen over Christmas and end up costing you money.
Now is the time to ‘winter proof’ your property to avoid this happening to you.
It is a good idea to have your boiler serviced, check ball cocks and clear gutters now.
Does your Tenant or Agent know what to do if there is an emergency over the festive break? Make sure they have the details of any specific people you would like called out to your property during this time.

It is also a good idea to inform the neighbours of your telephone number. Many Tenants go away for Christmas and if there was a water escape or any other emergency they can act immediately to avoid any further damage to your investment.
Get ahead now!
#property #winter #christmas

Some big changes announced yesterday regarding Stamp Duty payable on second homes with effect from 1 April 2016.

Buy-To-Let Landlords buying second homes will be subject to a 3% hike in Stamp Duty in every tax band.

This means that purchasing a £150,000 property which you would currently pay £500 in Stamp Duty for is set to cost £5,000.