Landlords of HMO’s in Coventry may face further costs with a new licensing scheme being introduced in May 2020. A Mandatory Licensing Scheme for HMOs has been in place since 2006 but the additional licensing will include smaller multi occupancy properties in some cases. Coventry City Council are pressing ahead with additional licensing as of the 4th May 2020 – although they have stated that they are easing some measures.
Landlords are no longer be able to deduct all their finance costs from their property income to arrive at their property profits. They will instead receive a basic rate reduction from their income tax liability for their finance costs. The restriction has been phased in gradually from 6 April 2017 and is fully in place from 6 April 2020. From 6 April 2020 landlords will not be able to deduct any level of mortgage interest before calculating their tax liability. Tax relief for all finance costs will be restricted to the basic rate of income tax, currently 20 per cent. Instead, once the Income Tax on property profits and any other income sources has been assessed, landlords Income Tax liability will be reduced by a basic rate ‘tax reduction’. The Government have also reformed how landlords of residential property can account for the costs they incur in improving and maintaining rental property. The Wear and Tear Allowance was abolished in 2015/16. Since April 2016, landlords can claim a ‘Replacement of domestic items’ relief, which is a tax relief on the costs of replacing a domestic item such as beds, sofas and fridges
As the coronavirus outbreak has a growing impact across the globe, here in the UK, economic uncertainty continues and property market forecasts vary, but what do we actually know about the current strength of our local property market and is now the right time to move?