Changes for landlords in 2018/19

Changes for landlords in 2018/19

Each year there are tax changes announced in the Budget, and regulations for landlords are getting tighter. We work with a lot of landlords across Gedling and Nottingham, so we wanted to write this article outlining four fundamental changes that have either come into force this year or will be happening soon.

1. Tax Relief Changes In 2018/19

In April 2017 changes to tax relief were introduced. Before this date landlords could use their mortgage payments to offset tax bills for each property at their highest rate of tax. Interest costs were counted as an allowable expense. A phased approach was introduced to reduce tax relief, it is currently at 75% and will continue to go down as shown below:

  • 2018/19 - 50% finance costs deduction and 50% given as a basic rate tax reduction
  • 2019/20 - 25% finance costs deduction and 75% given as a basic rate tax reduction
  • 2020/21 - all financing costs incurred will be given as a basic rate tax reduction

2. Minimum Energy Efficiency

In April 2018 all landlords renting a property for the first time or renewing a tenancy agreement must have Energy Performance Certificates (EPC) to show that the energy rating for the property is at E or above. Fines up to £5000 will be imposed if these regulations are not met. To find out more read our blog – Landlords, are you ready for the new EPC Changes.

3. Changes To Licensing Laws For HMOs

Residential Property Licensing reforms are being introduced on 1st October 2018 for landlords that have Houses in Multiple Occupation (HMOs). Currently, there is a ‘three-storey’ rule for a mandatory HMO licence. The new and licensing laws state that a home needs a licence if it has five or more residents who are not all related to one another share kitchen and bathroom facilities.

The cost of the licence varies between councils – the cheapest is around £500 for a five-year licence, while the most expensive is around £1,500. If landlords have not applied for a new licence by September 30 could face criminal prosecution and fines of up to £30,000.

4. Capital Gains Tax Rates

You have to pay Capital Gains Tax if you have made a profit when you sell (or “dispose of”) a buy-to-let property. In 2018/19 there is an increase in Capital Gains allowance to £11,700. There are higher Capital Gains Tax rates on profits above that allowance for buy-to-let investors.

We hope you found this article interesting if you are a landlord and would like to discuss how these changes will impact on your portfolio, please do contact us by calling 0115 956 9452 or email This email address is being protected from spambots. You need JavaScript enabled to view it.

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