Every year there are changes in tax and legislation , though 2021 will see more changes than usual. The pandemic has had a significant impact on the UK housing market. Many Landlords have accepted much lower rents this year with diminishing returns, whilst others have struggled to evict anti-social and defaulting tenants. This issue was exacerbated by the eviction ban introduced within days of the first national lockdown.
Despite the Chancellor’s Stamp Duty holiday, like all holidays, it will soon come to an end. The housing market is set to tighten up throughout 2021, with predicted price falls almost certain.
Navigating through Covid-19 and changes in legislation will be the main challenges, though the rental market is still growing. To keep you ahead of the curve, I have put together the list of important dates for your diary.
1. January 1st : Brexit
As we are all aware the UK will leave the European Union on January 1st. Brexit will bring about legislation change, some of it will be welcome news for Landlords. One of the significant changes will be the end of the EU Mortgage Credit Directive that will make it easier and cheaper for Landlords to obtain a mortgage. Brexit will have an impact on the Economy and the housing market, as the two are inextricably linked. There is also talk about what may happen to interest rates, though time will tell.
2.January 29th: 2nd reading of Dogs and Domestic Animals Bill
For Landlords, the new year will start with the proposed new law that if passed, will allow tenants to take a pet on to the property (provided they can prove they are responsible owners) without consent from the Landlord. There is cross-party support for the Bill and has been favoured by several animal-welfare charities.
3.March 6th: End of the Eviction Ban
Due to the pandemic, Landlords are obliged to give 6 months advance notice of all evictions. There are some provisions for serious cases such as domestic violence, anti-social behaviour and rent arrears of more than 6 months. This rule will be phased out by the end of March 2021.
4.April 1st: Stamp Duty Levy for Non—UK residents
From April 1st there will be a 2% Stamp Duty surcharge to all non-UK residents purchasing property in this country. If they become UK residents, they will be eligible for a refund.
5.April 1st: Client Money Protection
From April 1st all letting agents will need to comply with Client Money Protection. Certification must be displayed on the Agent website and in their respective office(s).It will be illegal for Letting Agents to trade without it.
6.April 1st: Deadline for Electrical Safety Compliance
As a Landlord, the property you are renting must have an electrical safety certificate. Your property may require some upgrading to satisfy the current regulations.This is the time to get the work done as the deadline is imminent. Anyone without a certificate will be breaking the law; No-certificate-no rental.
7.June 30th: Changes in Right to Rent Rules
Under the current rules Landlords and Agents must check the immigration status of all prospective tenants regardless of their nationality. With Brexit, there will be a points-based system from January 1st.In the meantime, passports and I.D cards are to be relied upon. Details of the amendments have yet to be rolled out. we shall wait and see.
8.No date confirmed: Changes to planning regulations
The Government is set to introduce new legislation to stop developers building homes without enough space or natural lighting. These will be known as minimum space and lighting requirements. This legislation will specifically target developers using permitted developers’ rights to stop them from converting buildings into new homes without applying for full planning permission.
9.No date confirmed: Amendment to Renting Homes (Wales) Act
This was proposed at the beginning of 2020, the amendment to the Renting Homes Act will mean that tenants in Wales will automatically be given 12 months protection from eviction (provided there is no breach of tenancy).Every property must have gas and electricity certificates, Landlords must also provide functioning smoke alarms and carbon monoxide detectors.
10.No date confirmed: Making Tax Digital for Landlords
For Landlords with turnover of more than £85,000 per year, you should have a digital tax account. HMRC requires that you send a quarterly report of your income and expenses. This works out your tax liability as you go, rather than submitting the annual tax return, at the end of the year you will need to sign a declaration to confirm the numbers are correct. The deadline for this is to be confirmed for 2021, though by 2022 it will be mandatory for all businesses, irrespective of turnover.
11.No date confirmed: Abolition of Section 21
Its highly likely that 2021 will see the abolition of Section 21. Under the current rules, Landlords can give 6 months’ notice to evict tenants after the end of a fixed term or for a tenancy with no end date. The abolition of Section 21 is part of the Renters Reform Bill, in future all evictions will have to go through the Courts.
12.No date confirmed: Changes to Capital Gains Tax
There has been talk of a hike in Capital Gains Tax, whilst the Chancellor did not mention it in November’s Budget, he has since hinted that tax rises in 2021 will be inevitable. This has led many to believe that there will be an announcement at some point throughout the year.
So that is all the keys dates for Landlords in 2021 to help you navigate through these forthcoming changes.