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2021: Important Dates & New Regulations for Landlords

Posted on Thursday, January 14, 2021


2021: Important Dates & New Regulations for Landlords

1. Stamp Duty Land Tax Ends

The Stamp Duty Holiday comes to an end on the 31st March 2021. The Residential Rates threshold will go down to £125,000, meaning tax will need to be paid on the value of the property above this amount.

This effect may end when the holiday ends, causing market activity and house prices to drop. Landlord ought to be aware of the effect this could have on their plans to buy or sell.

This doesn’t really effect Stoke-on-Trent too much Stoke-on-Trent house prices are considerably lower than that of the likes of London.

 

2. Electricity Safety Checks Become Mandatory

Landlords are required to have an EICR performed for all their properties in England by 1st April 2021. Landlords must then serve the tenants a copy of the report within 28 days. If necessary remedial work is identifying in the report, then it must be performed.

This applies for ongoing tenancies, not just new tenancies, so all landlords must comply.

 

3. Eviction Ban Ends in England

A ban on bailiffs enforcing evictions is due to end on 21st February. Eviction notices from courts to tenants require 14 days’ notice, and therefore 8th March is now the earliest that an eviction can legally be undertaken, except in extreme circumstances such as domestic abuse or arrears of over 6 months’ rent.

 

4. Eviction Notice Periods Revert to Two Months

When March ends, so too will end the temporary requirement for landlords to give tenants six months’ notice before commencing eviction proceedings.

Several groups, including Citizens Advice, have called on the eviction measures to be extended. The UK Government has pledged to end ‘no fault’ evictions and the end of the coronavirus measures on the 31st March could prompt the Government to review this manifesto pledge.

 

5. Furlough Scheme Ends

The Government’s Coronavirus Job Retention Scheme, also known as the furlough scheme, is due to wrap up at the end of April.

This is an important date for landlords whose tenants have been affected by coronavirus. If tenants currently being supported by the furlough scheme are not kept on by their employers when the scheme ends, then their income may cease on 31st March, meaning they may have difficulty paying their rent from this date.

We advise landlords to get in touch with tenants far ahead of time to find out if their tenants will be affected and agree suitable arrangements if needed.

 

Expected but Unconfirmed

A further set of changes have a good chance of coming into play in 2021, but have not yet been confirmed

 

Capital Gains Tax Rise

It is expected that the rate of Capital Gains Tax, paid on increase in the value of properties at sale, will increase in 2021. The Office for Tax Simplification in late 2020 suggested that CGT should fall into line with income tax. Income is taxed at 20% for basic rate and 40% for higher rate payers.

Currently, CGT on property is at 18% for basic rate taxpayers and 28% for higher rate payers. The tax must be paid within 30 days of the completion of the sale. For the higher rate payers, an increase to 40% would be a significant increase in the amount of tax paid when selling buy-to-let properties.

 

 

End of Section 21 evictions in England

In their 2019 General Election, the Conservative Party pledged to end no-fault evictions, as Section 21 evictions are commonly called. Landlords need no grounds to initiate this process, meaning tenants who pay their rent on time and adhere to their contract can still be evicted with two months’ notice.

The end of the protection’s tenants has been given during the coronavirus crisis may be a natural time for the Conservative government to act on its election pledge.

 

Plans to increase the minimum EPC grade to ‘C’

The minimum energy efficiency certificate that properties need to achieve in order to be legally let is currently grade ‘E’. But it’s looking like they are increasing this to a ‘C’. A confirmation of this plan is expected this year with the new rules mooted to come into force in 2025 or after.

The commitment of the Government to this plan may be hinted by the Green Homes Grant. The scheme allows homeowners, including landlords, up to £5,000 in vouchers to perform energy efficiency improvements on their property. The scheme will run until 31st March 2022. Millions of landlords will need to make improvements in order to achieve a C grade.

Possibly bad news for Stoke-on-Trent Landlords as over 50% of Stoke-on-Trent houses are graded E or lower.

 

Summary

  • Eviction ban ends 21st Feb 2021
  • Stamp Duty holiday ends 31st March 2021
  • Furlough scheme ends 31st March 2021
  • Eviction notice periods reverts back to two months 31st March 2021
  • EICRs become mandatory from 1st April 2021
  • Landlords should also be aware:
  • CGT may increase in 2021
  • S21 ‘no fault’ evictions may be scrapped in 2021
  • Plans to increase the EPCs from ‘E’ to ‘C’