UK landlords with Airbnb properties in EU to pay 20% VAT on rental income

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British landlords who use rental platforms to let holiday homes in the European Union will soon have to pay VAT on their rental income.

Under the EU’s VAT in the Digital Age scheme, from 2025, these landlords will need to pay an average of 20% VAT, regardless of whether they live in the same country or outside the EU.

According to Tax Assist Accountants, the charge will be applied to platform operators such as Booking.com and Airbnb, requiring landlords to factor this cost into their rental fees to maintain profit margins. 

The EU predicts that almost three-quarters (70%) of accommodation providers using on-demand platforms such as Airbnb and Booking.com aren’t VAT registered.

This will cause administrative headaches for operators, who will need to notify each applicable member state which providers are VAT-registered and those who don’t yet have VAT numbers. 

Agents

This also includes firms that act as local agents for landlords owning holiday villas, apartments and cottages across Europe. 

The programme is designed to make the EU’s tax rules in the travel and hospitality sector fairer; due to the complexities surrounding VAT registration, hotels and conventional taxi services currently pay VAT on all the sales they disclose, unlike independent landlords and taxi services. 

The firm says that it’s possible Chancellor Jeremy Hunt could monitor the success of the programme and consider taking a similar path to improve tax parity. 

View Full Article: UK landlords with Airbnb properties in EU to pay 20% VAT on rental income

Has anyone used a Zero Deposit scheme?

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Hello, has anyone used a Zero Deposit (ZD) scheme? I’m coming into the ZD scheme from fresh having always taken traditional deposits up front so I’m wary of the scheme at the moment. I have been advised it might be a way of getting tenants to come forward.

View Full Article: Has anyone used a Zero Deposit scheme?

Sell now before rates cause buyers to scatter and prices to plummet

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The NRLA recently reported that 1 in 3 landlords are going to trim down their portfolios. A whopping 33% of landlords currently selling throughout the UK. Of that 33%, most landlords agreed that they would be willing to take 80% of the value just to get rid of them because mortgage payments are out of control.

So we’ll get straight to the point. At Landlord Sales Agency, we get landlords higher than 80% value, faster. In fact in many cases we’ll even get you higher than the current market value. We’ll also sell your entire portfolio, or however many properties you need to shift, in less than a month. Our average sale time is just 21 days, for the best prices.

How? We sell to other landlords coming into the market. This means that tenants can stay – new landlords starting from a financially “fresh” position don’t mind taking your portfolio on no matter what condition, and they’re prepared to pay high prices for a ready-made deal they can fix.

Problem tenants? No problem for us, we mediate to ensure all your tenants are happy whilst you sell, or if they want to stay we’ll come up with a deal for you, and negotiate on your behalf. No one else is giving tenants this much security to ensure both you and your tenants walk away winning.

Need a refurb? We’ve got an entire team of builders to assist. Need to be compliant to regulations? We can help you with all your certificates.

Worried about what price you’ll get compared to an auction or estate agent? We’ll do you one better: nothing beats the bidding wars from our powerful database of over 30,000 private buyers who get alerts straight to their phones every time we list a new property.

Put simply, no one can beat us. We’re here to get landlords the best prices, and get them out of the market while they still can.

We’re the problem solver for landlords when they’re at the end of their tether.

So if you’re a landlord who needs to sell, come to us. You’ll want to act fast – with the eviction ban looming in just 12 months time, on top of already rising interest rates in a falling market, there’s no time like the present to ensure you exit the landlord sector unscathed and ready to invest elsewhere.

We don’t have to convince you to come to us, if you’ve seen our recent news before, you’ll know there’s a reason we’ve got the best relationships with landlord associations throughout the country. We’re fast, honest, and we do exactly what we say we’ll do.

Last week statistics showed that 3,000 landlords had tuned in to hear our podcast, The Landlord Show, giving advice on landlords wanting to sell. In the last two weeks alone, we had over 150 landlords approach us to sell. Our team of experts jumped in, ready to help every single one of them.

So get in touch today, let’s get you sorted. No matter how many properties you have, no matter what condition, we’ll get them sold and get you money in the bank so you can move on and avoid the financial crisis once and for all.

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View Full Article: Sell now before rates cause buyers to scatter and prices to plummet

New court service for tenants risks more landlords facing huge eviction costs

admin    Uncategorized     agents

The new Housing Loss Prevention Advice Service could result in more landlords fighting – and potentially losing – expensive court battles.

There are fears that the threat of a £15,000 legal bill if they lose their possession claim hearing could be enough to dissuade some from taking legal action.

From 1st August, tenants facing eviction or repossession can get free early legal advice on housing, debt, and welfare benefits issues before appearing in court, as well as continuing to get advice and representation on the day of their hearing. It replaces the Housing Possession Court Duty Service which only offers ‘on the day’ emergency advice and advocacy.

Unintended consequence

Paul Sowerbutts (pictured), head of legal action at Landlord Action, tells LandlordZONE that while it will mean more tenants get advice earlier, the likely – unintended – consequence will be more tenants also getting full legal aid, so that landlords end up fighting more lengthy and costly court battles.

He says costs of at least £15,000 for a one-day trial are not uncommon. “This scheme makes it more likely for a case to go to a full day trial – tenants can cause more mischief and are at a significant advantage,” says Sowerbutts. “If they lose the case, they don’t have to pay costs.”

More difficult

He adds that the upcoming reforms and this new scheme will make it more difficult to be a small landlord, although it should encourage a better relationship with tenants as landlords try to pre-empt problems.

One worried landlord tells LandlordZONE: “It seems very unfair as tenants don’t need to be means-tested to get help while we have to pay for representation, which is a lot for someone who only has one or two properties. The system is really weighted against landlords.”

Read more about the Housing Loss Prevention Services.

View Full Article: New court service for tenants risks more landlords facing huge eviction costs

BTL landlords should share capital gains profit with tenants – call

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Since tenants pay for their landlord’s buy to let mortgage repayments, they should get a share of the profits, one leading commentator says.

John Bird is the founder and editor-in-chief of The Big Issue, a social enterprise and street newspaper

View Full Article: BTL landlords should share capital gains profit with tenants – call

PRS reform legislation to cost landlords just £10 a year, claim campaigners

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Pro-tenant campaigners have claimed that the Government’s looming overhaul of the private rented sector will cost landlords a ‘meagre’ £10 each per annum.

The Renters’ Reform Coalition, a group that lists 20 organisations including several tenant unions, Shelter, Age UK, the Joseph Rowntree Foundation, Crisis and the Nationwide Foundation, has not revealed why it believes the huge changes will cost such a small amount.

Its statement published last night claims landlords can easily afford the money given the ‘median total wealth of buy-to-let landlords is £942,00’.

The coalition says it has made the claim in a bid to persuade the Government to accelerate its Renters (Reform) Bill which, although it was introduced nearly two months ago, has yet to receive a second reading.

Also, the Renters’ Reform Coalition accuses landlords – namely the NRLA – of conducting a “years-long lobbying campaign…to water down and delay the proposals, by claiming the additional regulation will drive landlords to sell their properties, and to push for favourable tax changes to compensate for any increased regulation”.

Negligible

Tom Darling, Campaign Manager of the Renters’ Reform Coalition, says: “The Government’s own Impact Assessment shows that the costs to landlords of the basic protections for tenants in the Renters (Reform) Bill are negligible, especially compared to the significant wealth of a typical buy-to-let landlord.”

“There is a crisis facing renters and the lack of progress on this important legislation is very concerning.”

“The Impact Assessment ought to give the Government confidence to ignore the hot air from landlord groups about the burdens of regulation, bring forward the Bill, and heed the Renters’ Reform Coalition’s demands to improve the protections for tenants in the legislation, such as through longer notice periods and extended protection from eviction.”

View Full Article: PRS reform legislation to cost landlords just £10 a year, claim campaigners

Big council looks at selective licencing to clamp down on bad landlords

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A major Midlands council is considering a selective licencing when its additional licencing scheme for HMOs finishes in 2025 as it seeks to answer critics who believe this type of property is damaging social cohesion in many areas.

The Cabinet committee of West Northamptonshire Council, which covers large swathes of the East Midlands, has asked its Head of Private Sector Housing Chris Stopford to gather evidence about the implementation of a selective licensing regime and make recommendations about its design and implementation.

While additional licencing only covers HMOs, selectively licencing usually covers all kinds of rented homes within an area and, in some cases, whole boroughs.

West Northamptonshire’s decision has been prompted by a review of the council’s approach to HMOs by a special working group that has finished its work after a year of investigation.

Criticism

The working group was established following recent public criticism of the detrimental effects of HMOs on local communities within West Northamptonshire and specifically its largest town, Northampton, and further condemnation over the increasing number of HMOs locally.

Members on the working group found that there are 1,164 licenced HMOs within the Northampton locality with three or more people from two or more households, of which 246 generated complaints from tenants about properties or landlord behaviour.

“Through the cross party Member Working Group we have had an opportunity to hear from a wide range of people and organisations to gain an understanding of the issues surrounding HMOs and the choices available to us,” says Councillor Adam Brown, Deputy Leader of the council and Cabinet Member for Housing, Culture and Leisure.

“These proposals aim to further equip the Council to protect tenants, support landlords and make our neighbourhoods more pleasant for everyone.”

Other recommendations within the report include more staff to clamp down on rogue landlords and unlicenced properties, tackle rubbish generated by HMOs, and improve access to the council’s register of licenced properties.

The council’s Cabinet is due to vote on the working group‘s recommendations next Tuesday 11^th July at its Towcester HQ (main picture).

Read LandlordZONE editor's opinion piece on HMOs and 'nimbysm'. 

View Full Article: Big council looks at selective licencing to clamp down on bad landlords

Government housing policies ‘not working’ for landlords or tenants, MPs are told

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Tax increases on private landlords are reducing supply but not increasing owner occupation, making it difficult for the PRS to be commercially viable, according to a housing sector academic.

Giving evidence to the Pensions and Work Committee on benefit levels, Professor Kemp (main picture), professor of public policy at Blavatnik School of Government, said these tax increases were meant to help first-time buyers better compete with landlords but that home ownership had not risen by that much.

Supply had also dropped due to the fact landlords could get tenants to leave after six months, some were switching to Airbnbs, and the impact of rising interest rates, said Kemp.

Rents rising

“Where they can, some are increasing rent,” he explained. “It’s possible to do that as demand is going up because of the post-pandemic return to city, and also as undergraduates are returning to Britain and some domestic students are also coming back, and we now have a delayed entry into owner occupation.”

With Local Housing Allowance set in September 2019, if rents went up then the number of people able to afford private rented housing on benefit would drop, said Kemp.

“If, is as happening now, rents are rising rapidly – with Zoopla reporting that rents have risen for new lettings by 10% – then that puts the squeeze on people on housing benefit on what they can afford and as a result they then have to use part of the rest of their Universal Credit to cover the shortfall.”

Automatically uprating LHA would help the relationship between landlords and tenants, he added, while NRLA chief executive Ben Beadle (pictured) told MPs that landlords would welcome better access to the Universal Credit system and a reasonable dialogue to resolve issues.

“We shouldn’t look at landlords as being a problematic customer which is how a lot of landlords feel at the moment. They want to help their tenants.”

View Full Article: Government housing policies ‘not working’ for landlords or tenants, MPs are told

Another UK city wants powers to impose rent controls

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In a bid to combat its growing housing crisis, one UK city has launched an appeal for the government to hand over powers to impose rent controls.

The initiative is part of a broader strategy to help private tenants

View Full Article: Another UK city wants powers to impose rent controls

Locate rooftop solar panels on commercial buildings

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Living in an era where the UK has concerns about the security of energy supply, rising energy costs, and the need to meet environmental considerations, looking to innovative energy back-up alternatives makes sense.

Since the shock of the war in Ukraine, it has become increasingly clear that the way UK energy is generated and distributed is not going to be all that sustainable long-term. Lack of investment has left the country vulnerable to future supply shocks, the global supply chain system is too unstable to be relied on and there’s little time left for the government to rebalance.

The country’s reliance on fossil fuels is considered damaging to the environment and the UK’s legally binding Net Zero target for 2050 means that viable and sustainable alternatives must be found.

Individual businesses also are under pressure to reduce their carbon footprints and meet emission targets dictated by UK legislation, as set out in the domestic and non-domestic Minimum Energy Efficiency Standard (MEES).

These regulations set a minimum energy efficiency level for private residential and commercial buildings, measured, monitored and controlled by the Energy Performance Certificate (EPC) regime.

Over recent years landlords, tenants and company managers have spent much time and energy thinking about these issues and how they can (1) meet the regulatory requirements in the must economical and efficient way, (2) reduce energy costs and (3) secure long-term supplies.

Potential future energy shocks and disruptions mean that these possibilities cannot be ignored. They would be very costly to any business operation, and potentially fatal, so the hunt for viable back-up alternatives cannot be delayed.

For commercial buildings, depending on size, location and orientation a large roof space often lends itself ideally to the siting of solar panels. These panels sited on rooftops are usually unobtrusive and every effective. As they are coming down in price through economies of scale, they offer an increasingly less expensive, clean and reliable alternative energy source.

There are vast swathes of commercial roof-spaces across the UK ideally suited to capturing the sunlight necessary to produce clean energy; energy used to power equipment, light buildings, to feed back into the grid for financial returns, or store in batteries to use when the sun doesn’t shine.

Attractive for tenants

Commercial buildings of the future need to be sustainably energy efficient, they also need to be attractive to tenants, if they are to let easily and quickly. This is major concern for landlords. It means that substantial investment is needed, and it means investment is needed soon if these buildings are to be compliant.

A matter of some urgency

The next two or three years will be crucial in making the right decisions as to what’s needed for your commercial buildings. With inflation pushing up prices by the day, and your competitors looking at similar solutions, it would be wise to act sooner rather than later.

It’s pretty obvious when you look at the amount of square footage represented by rooftops on commercial buildings, some of which occupy vast areas, solar is an ideal solution. Using this roof space as opposed to having large swathes of solar farms occupying green fields, it means we can greatly reduce the impact on our visible environment and on agriculture.

There is already an increasing trend for businesses to adopt this solar rooftop solution. It might mean a substantial initial investment, but the payoff is substantial; it has the potential to increase the value of a commercial buildings as well as the desirability of a building for tenants. Landlords / tenants would receive substantial savings in their on-going energy costs.

International commercial law firm Hill Dickinson LLP’s Sam O’Doherty, writing for Lexology.com says :

“By generating their own electricity, businesses are able to significantly reduce their reliance on the national grid, and therefore reduce their energy bills. This is particularly important for businesses that operate during daylight hours, being the time that the solar panels will be generating the most electricity. An optional extra could be storing this energy on-site, but alternatively feeding it back into the grid can reap further financial benefit where certain schemes [Government schemes] can provide financial incentives for businesses that generate their own renewable energy, which can help to offset the initial cost of the installation.

“By generating their own renewable energy, businesses can substantially reduce their carbon footprint which will contribute to the UK’s efforts to tackle climate change. This is particularly important for businesses that operate in sectors with high carbon emissions, such as manufacturing and transportation, or where premises are comprised of multiple units that generate additional emissions through intensive use or by the use of vehicles to/from them.

“Businesses that use rooftop installations to generate their own renewable energy are seen as more environmentally friendly and socially responsible… which can be attractive to potential buyers or future tenants. Rooftop solar panels can act as a marketing tool, demonstrating a business’s commitment to sustainability and helping to attract customers or clients who value environmentally friendly practices.”

Energy Savings

Recent studies over a number of years have shown that substantial savings can be made when businesses have solar panels on the commercial buildings. According to one study by the The Solar Trade Association (STA) a 20 per cent saving on energy costs is possible, and a study by the Carbon Trust found that the average payback period for rooftop solar installations was between 6 and 8 years.

A more recent study by the STA in 202 found that on average a 50kW rooftop solar installation in the UK can generate savings of around £8,000 to £10,000 per year, whereas larger installations of up to a 250kW installation can potentially generate savings of up to £40,000 per annum, according to Lexology.com.

According to Sam O’Doherty there are several government schemes and grants available to businesses to financially assist with commercial solar rooftop installations? These include:

Smart Export Guarantee (SEG)

“This scheme requires energy suppliers to offer a tariff for the excess energy generated by small-scale, low-carbon generators, including rooftop solar installations. This means that commercial landlords can sell the excess energy generated by their rooftop solar installations to energy suppliers and receive payment for it.”

Renewable Heat Incentive (RHI)

“This scheme provides financial incentives to commercial landlords who install renewable heating systems, including solar thermal systems. The scheme is also open to non-domestic properties and provides payments for up to 20 years. The amount of payment received through the RHI is calculated based on the amount of renewable heat generated and is paid quarterly. The payments are designed to cover the cost of the installation and provide a return on investment for the property owner.”

Energy Efficiency Financing Scheme

“This scheme provides loans to commercial landlords who want to install energy-efficient measures, including rooftop solar installations. The loans are provided by the Carbon Trust and are designed to help businesses reduce their energy bills and carbon emissions.”

Carbon Trust Green Business Fund

“This scheme provides up to £10,000 of capital contribution towards the installation of energy-efficient equipment, including rooftop solar installations. The scheme is open to small and medium-sized businesses in the UK and is designed to help businesses reduce their energy bills and carbon emissions. The Fund also provides free energy assessments, training, and advice to those businesses.”

Industrial Energy Transformation Fund (IETF):

“This scheme provides grants to businesses in the UK to support the development of energy-efficient technologies and processes. The scheme is open to businesses in the industrial sector, including those that install rooftop solar panels, and provides up to 50% of the project costs. To qualify, the premises must be used for an industrial business (such as engineering or manufacturing), must provide a demonstrable commitment to carbon reduction and must meet certain, IETF specific eligibility criteria.”

Feed-in Tariff (FIT)

“This applies once energy is being generated from a rooftop installation. FIT acts as a guarantee for commercial landlords that they will receive a set price for the electricity they generate and feed back into the grid. Steady income, and also the assistance offered by regular payments in offsetting installation costs associated with renewable energy systems, can often be what makes an installation financially viable for commercial landlords.(Note that FIT is not currently deemed compatible with SEG).”

The Feed-in-Tarif

Through the operation of the FIT, return on investment can be pretty much immediate once an installation is completed. Landlords / tenants can immediately monetise the energy their solar panels are generating by selling their excess energy generated back into the grid. They will receive credits for this and therefore only pay for their net energy usage.

Carbon Credits

After taking all the measures they reasonably can to reduce their carbon dioxide emissions (carbon footprint), UK businesses that are producing excess carbon dioxide are required to purchase carbon credit offsets – often from forestry companies. These carbon credit tradable permits allow businesses producing their own clean energy via solar panels to earn money in this way as well.

Improved environmental credentials and business reputation

Sometimes overlooked in all this scenario is the businesses’ reputation and the improved “image” value of property owners and businesses investing in these energy saving innovations – businesses are increasingly being judged on their contribution to energy saving and environmental protection.

With acknowledgments to Hill Dickinson LLP, Sam O’Doherty, and Lexology.com

View Full Article: Locate rooftop solar panels on commercial buildings