Rush of places for event
Tax change alarm prompts landlords to seek advice
Landlords are seeing big changes in the lettings sector (photo by Terry Murden)
The biggest shake-up of Scotland’s letting industry in 30 years is causing mounting concern among landlords who are facing a hike in their tax liabilities.
An event organised to review the changes is now expecting a surge in the number attending.
Advisers from tax firm Anderson Anderson Brown and letting agent Aberdein Considine are hosting the free seminar in Edinburgh to help those with multiple properties deal with a raft of recent tax and legislation which have caused a seismic shift in the sector.
Research published by Aberdein Considine shows that almost two-thirds of homeowners have put off investing in a second home due to the 3% additional levy introduced by the Scottish Government in 2016.
The additional tax – together with the staged withdrawal of relief on mortgage payments by the UK government – has seen a drop in sales in the Scottish property market in many parts of the country.
“In terms of how much the tax cost will be, it’s very much dependent on individual circumstances,” he said. “However, the restriction of tax relief on mortgages alone could double tax liabilities for many.”
Adrian Sangster, National Lettings Director at Aberdein Considine, said the changes also present enormous opportunities for investors who can “ride the storm”.
He said: “The additional tax – together with the staged withdrawal of relief on mortgage payments by the UK government – is undoubtedly having a detrimental impact on the Scottish property market.
“The demand for the event has been incredible and probably reflects the concern amongst landlords in the market.”
The Edinburgh Landlord Conference will give landlords the chance to learn about the changes directly from the experts and offer them helpful advice on what they can do to mitigate the impact.
Aside from the additional tax, the biggest change to hit landlords in recent years is The Private Housing (Tenancies) (Scotland) Act 2016, which has introduced the Scottish Private Residential Tenancy, the new form of private tenancy for Scotland.
Under the new regime, tenancies have no minimum period and will continue indefinitely unless the tenant wants to leave or the landlord terminates using a prescribed ground for eviction.
The ‘no fault’ ground of termination under Short Assured Tenancies (SAT) has been removed from landlords.
The main recent tax changes facing landlords are:
– Restriction of tax relief on mortgage interest
– Additional Land & Building Transaction taxes
– Abolition of Wear & Tear allowances
– Higher Capital Gains Tax rates
– Accelerated payment of Capital Gains Tax for Non Residents
– Increased reporting for UK property disposals by Non Residents
The Edinburgh Landlord Conference takes place at the Radisson Blu on the Royal Mile on 28 June.