Temporary Welsh increase to nil rate band of LTT for main residences only

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The Welsh Government has announced a temporary increase to the nil rate band of Land Transaction Tax (LTT) to £250,00 for main residence property transactions from 27th July 2020 until 31st March 2021.

The tax paid for higher rate residential or non-residential transactions are unchanged.

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International Student payment before arrival?

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We are considering an International Student who has viewed the room to rent via Whatsapp and has chatted to me about the rental. She would like to take the room, but will not be in the UK until mid-September.

We have agreed to commence a 12-month tenancy from 1 September and will email the contract to her

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Church of England Diocese tenant eviction?

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We have a property rented to the Local Diocese of Church of England on a Company Letting Agreement for 2 years. The agreement has ended, but the permitted Occupiers refused to leave the property on the basis of the current coronavirus outbreak.

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INVESTIGATION: the ‘property gurus’ pushing Bounce Back loans as ‘free money’

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YouTube is littered with videos by property gurus discussing with varying levels of expertise and probity how to apply for business Bounce Back loans and – in some but not all cases – implying indirectly that that they are a cheap way to raise finance to buy property.

Some are from controversial characters such as Paul Smith and Samuel Leeds, but also a plethora of other ‘millionaire property gurus’ such as Glen Armstrong and Ranjan Bhattacharya.

And as we reported recently, one of them – Paul Smith – was investigated by a national newspaper over his suggestion that investors should use Bounce Back (BB) loans to buy property.

This kind of advice can be given by gurus freely and legitimately because HM Treasury’s guidance is extremely vague about what these loans can be used for, saying only that they are to help businesses ‘keep operating’ or ‘stay afloat’ during the crisis.

But would this include using a BB loan to put down a deposit on a mortgage property?

Glenn Armstrong of Property Millionaire Academy, who has posted several videos discussing the loans with property sourcing guru Christoz Wild, is one of the more cautious advice givers, but nevertheless suggests the loans can be used in some circumstances to buy property.

He tells LandlordZONE that the loans “can be used for development projects if you lend it to another company, but not as a deposit for buying investment properties.

“And most investment properties would not be profitable if you had to pay [the Bounce Bank loan] interest from rent income. Most lenders will not lend if they know deposit is from a BB loan.”

Wild says government guidelines state that BB loans must be used ‘for the economic benefit of the business’ so an example given is that the company receiving the loan could lend it to another company for a higher rate of interest.

“The new company would then be able to use the funds as it wishes within the property sector, subject to any restrictions that the original company gives in the loan agreement,” he says.

Cyril Thomas, who heads up the Property Investors Bureau, has told LandlordZONE that: “We would not encourage investors or individuals to do anything in breach of the terms of their loan – I don’t want to get into the moral maze of what these loans should or shouldn’t be used for, but to keep it factual.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – INVESTIGATION: the ‘property gurus’ pushing Bounce Back loans as ‘free money’ | LandlordZONE.

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LATEST: Welsh landlords excluded from stamp duty ‘holiday’ scheme

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Welsh landlords are to miss out on a property tax handout aimed at helping first-time and cash-strapped buyers in the region.

In a similar move to the Scottish government last week, Welsh finance minister Rebecca Evans has cut the rate payable for properties valued at between £180,000 and £250,000 from 3.5% to zero from 27th July until the end of March 2021.

The change means that about 80% of house sales in Wales will be exempt from paying tax.

But, like Scotland, the change to land transaction tax – the Welsh equivalent to stamp duty – won’t apply to second homes or buy-to-let properties, which have to pay an additional 3% in tax on top of the existing rate for their value.

Evans says: “It will support people looking to purchase their first home or those seeking to move up the property ladder.

“So it will offer more targeted help to those who may be affected by the economic challenges resulting from the pandemic.”

She adds that her decision was “very much a response” to Chancellor Rishi Sunak’s change to the system in England last week, saying the “porous” nature of the Wales-England border was a motivating factor.

In England and Northern Ireland, anyone completing on a main residence costing up to £500,000 between 8th July and 31st March won’t pay any stamp duty, and more expensive properties will only be taxed on their value above that amount.

Scotland also announced a rise in the threshold of land and buildings transaction tax, from £145,000 to £250,000.

In England and Northern Ireland, landlords and second home buyers are also included, but will still have to pay the extra 3% of stamp duty they were charged under the previous rules.

Read more about legislative changes in Wales affecting landlords.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Welsh landlords excluded from stamp duty ‘holiday’ scheme | LandlordZONE.

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Landlord Law HMO Day – 19th August

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A new virtual training event for HMO landlords from Landlord Law: book your place here

Are you an HMO landlord?  Or do you work with HMO landlords or manage an HMO property?

If so

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Is Sunak planning to raise landlord Capital Gains Tax rates to fund his Covid spending?

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Chancellor Rishi Sunak has ordered a review of the Capital Gains Tax (CGT) system amid fears that he is to claw back some of the £188.7 billion the government has spent propping up the economy during the coronavirus pandemic sooner than expected.

The review by the Office for Tax Simplification (OTS) will not be good news for landlords, who are one of the key sources of CGT revenue for the government and who already pay up to 28% on gains from residential property.

One area the OTS may consider hammering include the CGT tax-free allowance that mitigate much of the impact of the tax on residential property gains, which is currently set at £12,300.

The chancellor is also likely to look closely at tax bands – depending on a property owner’s income, the level of CGT varies between 18% and 28%.

According to a report in today’s Times newspaper, Sunak is looking at whether to raise ‘historically low’ CGT rates to match equivalent income tax rates, and raise £90 billon over the next five years.

But sources at the Treasury have said the review of CGT should not be read as an automatic plan to raise levels of CGT, although The Times notes that the move ‘will prompt speculation’ ahead of the Autumn budget announcement.

A tax hike would not be a surprise – the government is scheduled to spend in total £370 billion this year, and that in order to bring spending back down to 75% of GDP, £60 billion will have to be found every decade from tax raising or spending cuts for the foreseeable future.

But landlords can have their say. The OTS has already published an online survey and a call for evidence to seek views about Capital Gains Tax.

Read about the CGT rule changes that came in earlier this year.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Is Sunak planning to raise landlord Capital Gains Tax rates to fund his Covid spending? | LandlordZONE.

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Chancellor requests review of CGT by the OTS

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The Chancellor, Rishi Sunak, has requested a review of Capital Gains Tax (CGT) in an open letter to the Office of Tax Simplification (OTS). This could indicate the Chancellor is considering a future increase in the CGT levy in an attempt to shore up the UK’s finances.

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PRS giant says just 0.49% of its 2% rent arrears are due to Covid

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A rental property building firm has managed to collect an impressive 98% of rents from its hundreds of tenants around the UK during lockdown.

PRS REIT’s extraordinary rent collection figures are in stark contrast to the recent Shelter report showing how thenumber of private tenants in England who have fallen behind on rent has grown during the pandemic, to 442,000.

Even the bullish Belvoir property group has reported that at least 5% of its tenants are in arrears.

Tenants at PRS REIT’s smart rental properties are made up of families, downsizers and early retirees – and prospective renters are checked to make sure they can reliably cover the rent.

A spokesman tells LandlordZONE: “We’re pleased that rent collection has remained resilient during the lockdown period.

“This reflects the continued significant demand for our high-quality product, which is supported by market-leading customer support for residents.”

The real estate investment trust, which invests in new-build homes for the private rented sector, reports that rent collection “wasn’t materially impacted” by the national lockdown, with 98% of rent due in the quarter to the end of June collected – down from an even more impressive 99% in the quarter before lockdown.

The firm says it’s agreed payment plans for those households that needed help and reports that the equivalent of just 0.49% of annual rent was in lockdown-related rent arrears.

PRS REIT recently finished building its 2,000^th home and has another 2,900 in development.

It’s blamed COVID-19 on a slowdown in home completions, which fell to 135 new rental properties in the last quarter, down from 330 in the previous quarter, because construction had been suspended or disrupted. And while the pace is now slower, due to social distancing requirements, it expects about 450 new homes to come on line by September.  

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – PRS giant says just 0.49% of its 2% rent arrears are due to Covid | LandlordZONE.

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Letting agents! Get up to speed on the post-Covid world for £25

admin    Uncategorized     agents

Are you a letting agent who has either been away from the game for a while during Covid or who wants to continue your professional development?

Then HF Assist is offering agents a three-and-a-half hour online workshop lead by Susie Crolla from the Guild of Letting & Management and Hamilton Fraser brand ambassador Paul Shamplina.

“Like all our courses it’s aimed at independent agents who probably aren’t signed up to an industry body but who want to develop professionally,” says Shamplina. “It’s what we’re all about – supporting and protecting agents.”

The workshop will count towards an agent’s Continuing Professional Development (CPD) hours and is to take place between 9am and 12.30pm on 30^th July.

It will give agents post-Covid guidance plus legal updates and compliance advice, and also inform them about the current situation with possession notices and evictions.

And for those unaware of the looming banning of Section 21 ‘no fault’ evictions and the repercussions of the tenant fees, Susie and Paul will also brief those attending on these topics too.

Other issues to be covered by the duo include the recent changes to electrical safety standards and looming new procedures to comply with the government’s soon-to-be revealed eviction pre-action protocols.

The Back to Business: Returning to work post COVID-19 workshop costs £25 to attend, and requires online registration.

“We ran quite a few courses last year but because agents can’t do face to face meetings now, we though we’d give something back to agents by offering them an affordable and practical update that’s in their own ‘letting agent language’,” says Shamplina. “At that price it’s a no-brainer as agent will also get a workbook before the event and also a certificate when they’ve completed it.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Letting agents! Get up to speed on the post-Covid world for £25 | LandlordZONE.

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