The National Landlords’ Association (NLA) has revealed that 47% of landlords will be hit when the annual wear and tear allowance is removed from next year.
The move was announced by the Chancellor, George Osborne, in his latest Budget for the allowance to be removed and instead landlords will have to claim for the actual costs they have incurred when replacing furnishings.
Currently landlords can claim 10% of their rental income against tax for ‘wear and tear’ regardless of whether they actually spent any money on replacement items.
The new rules cover furniture, kitchenware and appliances provided for tenants which will also include fridges, televisions, carpets, curtains and crockery among other items.
The head of policy at the NLA, Chris Norris, said: “We understand landlords’ frustration who let exclusively furnished properties since the allowance removal will represent a reduction in the relief claimed.
“However, the change will be welcome for those landlords who let a mixed portfolio of part furnished or unfurnished properties since they will be able to deduct their legitimate expenses.”
NLA welcomes new tax proposals for landlords
He added that the NLA is welcoming the new tax proposals because it brings about a fairer system for landlords and the organisation is putting in place a system to help those landlords who have budgeted for offsetting their costs against the current allowance.
Mr Norris said that landlords who had invested in buy to let properties on the basis of the current allowance should not be disadvantaged by the change in tax allowances.
The NLA research reveals that the number of properties being let as fully furnished by landlords is 24% of those questioned, while 53% said their properties were unfurnished.
Another 22% of landlords said their portfolio consisted of unfurnished and furnished properties.
Letting agent warns tenants of rogue landlords
Meanwhile, a letting agent in Nottingham has warned tenants to protect themselves after claims that the city is among the worst for rogue landlords.
AcornLettings says that from published data, Nottingham is one of the UK’s top 10 cities for prosecuting rogue landlords.
Between 2006 and 2014, the firm reports, 46 landlords were prosecuted and fined a total of £141,000.
The firm’s managing director, Richard Hopwood, said: “Rogue landlords are a serious concern and poor housing has an effect on the well-being and health of tenants.”
However, he also points out that it’s easy for a decent landlord to be tarnished as a ‘rogue’ if they have the best of intentions but do not follow all of the regulations for letting property accurately.
