STAMP DUTY AND ELECTRICAL SAFETY: KEEPING TRACK OF BTL CHANGES
The buy-to-let sector is well accustomed to change, but this doesn’t mean that landlords should become complacent when it comes to the implementation of any new policy or legislation.
In a quick recap of recent BTL-related events, April saw the introduction of minimum energy efficiency standards and the second part of the Tenant Fees Act was introduced in June. It is now time for landlords to turn their attention to the new electrical safety standards which came into force on 1st July. This means that all electrical installations must now be inspected and tested by a qualified person before a new tenancy begins.
Rented properties will need to be certified as safe by way of an Electrical Installation Condition Report (EICR) prepared by a suitably qualified person, and landlords will have to supply the report to each tenant within 28 days of the inspection and retain a copy until the next inspection is due. Landlords will also need to ensure the installations are inspected and tested at least every five years thereafter.
The stamp duty cut announced in the recent mini-budget will also apply to those buying second homes and buy-to-let properties. Government documents published following the Chancellor’s speech state that the tax relief for properties worth up to £500,000 will apply for those buying a first or subsequent property. However, the 3 per cent surcharge for buying additional properties will apply in addition to the new standard rates.
Therefore, for purchases in addition to a first home, just 3 per cent will be paid for properties valued at up to £500,000, as opposed to the 5 per cent paid before the adjustment.
After that, rates will apply as follows:
- The next £425,000 (the portion from £500,001 to £925,000) – 8%
- The next £575,000 (the portion from £925,001 to £1.5 million) – 13%
- The remaining amount (the portion above £1.5 million) – 15%
Landlords are facing a number of challenges within the current economic climate, making your advice more important than ever. Use your knowledge to ensure that your clients are kept up to date on all stamp duty, regulatory and legislative demands at this critical time.
Ying Tan - 09.07.2020 | Posted in