Letting and Renting Information Pack
If you are thinking of letting your property out or renting a property this information pack emphasises how important it is to get the right professional advice from the very start. We hope it will be both informative and helpful to you.
Letting is a popular option for home owners moving out of their property for a time and for investors seeking rental income. It is essential to establish whether it is an option suited to your circumstances and we offer free expert advice on the advantages and disadvantages.
Or aim is simple. We want to give you the highest possible levels of service so that you have total peace of mind when leaving your property in the hands of someone else.
There is a lot to letting so if you would like to discuss your property in more detail why not call and speak to us.
Income Tax
The profit obtained from renting a property is liable to tax whether or not you live in the UK. Several items of expenditure can be offset against rental profit of which the following list covers the main tax-deductible areas. If you require clarification on these matters we would recommend that you seek the advice of an accountant as tax status does vary.
- Loan or mortgage interest
- Building, Contents and Legal Insurance premiums
- Agents Charges (i.e. our Management Charges) + VAT.
- Buildings, repairs, decorations and cleaning to the property
- General wear and tear – this allowance is normally given for hard furnishings and fixtures where a property is furnished.
- Nominal amounts for postage and telephone charges relating to the property.
- Any other expenses which are directly associated with the letting of the property.
Any communication with the Inland Revenue is the responsibility of the Landlord or their accountant. We do not withhold tax for Landlords resident in the UK.
For full information the Inland Revenues Landlords Tax Guide is available by contacting your local Inland Revenue Office or on the internet (www.hmrc.gov.uk).
Overseas Landlord Taxation
The Inland Revenues new assessment rules changed the treatment of Overseas Landlord Tax with effect from 6th April 1996. Under the Taxation of income from Landlord(Non-Residents) Regulations 1995, the rent receiving agent is required to deduct basic rate tax from the rent(after taking deductible expenses paid out into account) and to pay the tax to the Inland Revenue each quarter. If the property is not managed you should be aware that your tenant will be legally responsible for the collection and payment of tax to the Inland Revenue.
However, overseas landlords can apply to the revenue for the exemption from this requirement providing your tax history is good and up to date. The overseas landlord will be issued with a certificate with a copy sent direct to the managing Agent authorising us to pay rent without any tax deductions.
We strongly advise that applications for exemption are submitted as soon as you are aware of your move overseas to ensure rent can be paid gross.
Safety Regulations
The Landlord and /or his managing agent are responsible for ensuring that the rented property meets safety standards with regard to the gas installation, pipe work and appliances.
Gas Safety
An approved Gas engineer must carry out safety checks every 12 months. A written safety record must be supplied to the tenants, this is in addition to the regular servicing of appliances.
Failure to hold a current safety record or certificate is a criminal offence and makes the landlord or his management agent, liable to a fine, imprisonment or both. Current regulations also require a Landlord to give a copy of the current gas certificate to the Tenant.
Electrical Safety
In order to comply with the Consumer Protection Act, Landlords must ensure that each electrical appliance (kettle, toaster etc) as well as the electric supply and installation (e.g. wall sockets, light fittings, etc) is safe and does not present any danger to a user. To ensure compliance with the act a regular (annual) inspection and testing report is necessary.
All appliances supplied must have all the necessary instruction books and warning details and we would recommend copies are taken and left at the property.
Briscombe Nutter and Staff can arrange through qualified engineers to carry gas and electrical safety inspections (prices on application)
Furniture and Furnishings
All upholstered furniture and furnishings (i.e mattresses, cushions – not carpets and curtains) manufactured after 1950 are required to be fire resistant.
The law relating to the manufacture of furniture is quite clear – all materials used must meet the Furniture and Furnishings Regulations 1993. Manufacturers are required to affix permanent labels on their products such that their removal would cause damage to either the label or the product.
Smoke Alarms
All property built since 1992 has to be fitted with mains operated and battery linked smoke alarms on every floor, as required under the Buildings Regulations Act 1991. There are no similar regulations for older property although we would always recommend that consideration be given to the fixing of smoke alarms.
General Letting Information
Mortgages
If the property you intend letting has a mortgage, you must apply to your lender for permission as you may be in breach of your mortgage agreement if you don’t.
Some lenders may charge for considering your application and for approving its tenancy and some may raise the interest rate on your mortgage whilst you are letting.
Buildings Insurance
It is advisable to check that your insurance company is aware of your intentions to let the property.
Post
You should advise the Post Office of your change of address and arrange for all mail to be re-directed. It is certainly inadvisable to expect your tenant to be responsible for forwarding your mail.
Leasehold Properties
Should the property you intend letting be a leasehold property, permission must be sought from the freeholder prior to the tenants occupation. If you do not seek permission you may be in breach of the conditions of the lease.
Ground Rent
The Landlord is responsible for any Ground Rent and Service Charge levied on the property during the tenancy.
Houses of Multiple Occupancy (HMO’s)
Under changes in the Housing Act 2004 if you let a property which is one of the following types it is an HMO :
- Properties of three or more floors, with five or more tenants belonging to two or more households, by law, will require a licence from the Local authority.
For more information on mandatory HMO licensing and to identify whether you have a property that needs licensing, visit www.propertylicence.gov.uk.
