Another year, another change to taxation and legislation. Most property managers have a lot on their plate. At times, keeping up with all the annual renewals can be a little overwhelming—especially following the year we’ve just had.
You’re probably well-versed with a few changes that have come our way already; Brexit and January’s online tax return deadline, to name a few.
But we’ve still got the rest of 2021 to go, so here are HomeHero’s ten key dates that property managers need to jot down in their diaries. Who needs a pen?
1. Stamp Duty Changes (1st April)
From the 1st of April, property managers can expect to see stamp duty changes for non-UK residents who purchase or rent a property in this country.
They will be liable to pay an additional 2% stamp duty surcharge. This applies to purchases of both freehold and leasehold properties and rents on the grant of a new lease.
They may be eligible for a refund if they meet UK residency requirements within 12-months of paying the surcharge.
2. Client Money Protection Scheme deadline (1st April)
The deadline for property managers to join a ‘client money protection scheme‘ has been set for the 1st of April—and it’s been a long time coming.
This form of insurance protects the money of property managers and tenants against theft from the letting agent, and you’ll have to be compliant by the 1st to qualify.
3. Deadline for Electrical Safety Compliance certificate (1st April)
Another deadline for the 1st of April involves the Electrical Safety Compliance (EICR) certificate. Both landlords and property managers will need to possess one for every property in their portfolios.
The certificate proves that a qualified electrician has safely tested and reported on all fixed electrical installations on the property.
From the 1st of April 2021, all existing tenancies must have one. If you fail to be compliant, not only will you be breaking the law, but a local authority can issue you a fine of up to £30,000.
4. End of the Eviction Ban (31st May)
Some good news for property managers; the emergency legislation, which increased the minimum notice period to 6 months in England, is coming to an end on the 31st of May.
However, there are some exceptions for domestic abuse cases, anti-social behaviour, and tenants racking up more than six months worth of rent arrears.
But despite its extensions, the legislature requiring 6-months’ notice for most evictions is set to phase out at the end of May.
5. Changes to Right to Rent (30th June)
All property managers must check all tenants’ immigration status to determine whether they can legally rent their property—regardless of ethnicity or nationality.
With Brexit introducing a points-based system on the 1st of January, the Government asks property managers to continue using national ID cards and passports as a provisionary measure until the 30th of June arrives. More information to come after that!
6. End of the Stamp Duty Holiday (30th June)
In the March Budget, Chancellor Rishi Sunak confirmed the Government would be extending the Stamp Duty Holiday till the 30th of June. After that, the nil rate band will be set at £250,000 until the end of September, when it will return to £125,000.
7. Changes to Planning Regulations (Date TBA)
The Government is due to introduce new legislation that aims to stop developers building homes without sufficient space or natural lighting—these will be known as minimum space and lighting requirements.
The aim is to stop developers using permitted developers’ rights (PDR). This fast-tracking process currently allows them to transform buildings into homes without applying for full planning permission, and the legislature will prevent this from happening.
The Government is to announce the date sometime this year, so watch this space!
8. Making Tax Digital for Property Managers (DATE TBA)
As a property manager, you should have a digital tax account (MTD) if you have a turnover of more than £85,000 per year. If you’re not using MTD, but you qualify, you’ll need to sign up and the Government will confirm the deadline sometime this year.
There will be an additional deadline in 2022 for all property managers to sign up, regardless of turnover.
The system requires you to send HMRC a quarterly report of income and expenses via your digital tax account as you go. So, instead of submitting an annual tax return at the end of the year, you sign a declaration to say the figures are correct. Oh, so simple.
9. Abolition of Section 21 (DATE TBA)
There are talks that 2021 may see the abolition of Section 21. Under current rules, property managers can issue a six-month eviction notice after the end of a fixed-term or for a tenancy with no end date, like a rolling tenancy.
The abolition comes with the Government’s planned Renters’ Reform Bill, which essentially means that all evictions will have to go through the courts.
10. Changes to Capital Gains Tax (DATE TBA)
While there’s been widespread speculation that there would be an increase in Capital Gains Tax (CGT) this year, it dodged a bullet in the Budget earlier in the month.
The Office of Tax Simplification has called for CGT to increase, so it’s in line with income tax rates; 20% at the basic rate and 40% at the higher rates. The amendments also include lowering the initial amount exempt to £2,000.
Although Rishi Sunak made no mention of it in the March Budget, it’s worth it for all property managers and second homeowners to keep an eye out—it may come into effect next year.
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