NEW: Government’s latest ‘green homes deal’ to be revealed this week

The government is expected to pledge to landlords and homeowners that installing a heat pump will cost ©1999 - Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® - NEW: Government’s latest ‘green homes deal’ to be revealed this week | LandlordZONE.

NEW: Government’s latest ‘green homes deal’ to be revealed this week

The government is expected to pledge to landlords and homeowners that installing a heat pump will cost no more than fitting a standard boiler by 2030 as part of its new Heat and Building Strategy due to be published this week.

Business and Energy Secretary Kwasi Kwarteng is set to announce plans to reduce the cost from £10,000 to £5,000 within three years along with a pledge to invest £60 million in heat pump innovation to make them smaller and easier to install.

However, landlords and heating experts have warned that any support will need to be easier to access than previous green schemes.

The government will announce 2035 as the cut-off date when natural gas boilers will no longer be installed in existing homes following its promise to fit 600,000 heat pumps each year by 2028 to help the UK meet its net zero target.

Low-carbon consultancy Gemserve says it understands that BEIS is considering an obligation on manufacturers which would require them to meet a minimum threshold of renewable heating system sales as a proportion of their total.

This proposal is similar to obligations placed on car manufacturers over recent years and has the potential to drive down costs.

Kevin Wellman (pictured), CEO of the , tells LandlordZONE that he expects details of the Clean Heat Grant – which comes into effect next March – finalised, including which heating systems will be eligible.

He would also like to see a viable alternative introduced to the .

“It is important that any schemes are easy for landlords and qualified installers to access, as there is a real danger of a miss-match between supply and demand,” he says.

“In order to achieve the government’s aspirations for net zero, 100,000 installers need to be upskilled in low carbon technologies.”

Many landlords believe the targets are wishful thinking and that its aim to see all rented properties raised to an energy rating of band C or above by 2030 is a ‘’ unless upgrades are backed with financial and practical support.

Read the Commons guide to the

©1999 - Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® - NEW: Government’s latest ‘green homes deal’ to be revealed this week | LandlordZONE.

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UPDATED: The attractions of Holiday Lets

In the absence of viable alternatives, with ultra low interest rates and soaring property asset prices, investment ©1999 - Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® - UPDATED: The attractions of Holiday Lets | LandlordZONE.

UPDATED: The attractions of Holiday Lets

In the absence of viable alternatives, with ultra low interest rates and soaring property asset prices, investment in property has become a phenomenon of 21st century Britain and holiday lets, holiday homes and holiday letting businesses are no exception.

Tax advantages  

In addition, there are some valuable tax advantages with holiday lets over buy-to-let properties. For example, capital gains tax on profits when you sell is lower with holiday lets and as it’s a business you can claim more expenses from your rent every year to reduce income tax.

Tax advantages like these can be a real boost when you see that some properties have achieved 25% increases in the first decade of the 21st century and this has continued.

Don’t think that your holiday cottage need be beside the sea: many of the tourist hotspots and Heritage Trail cities such as York, Stratford, Bath and Edinburgh can attract very good rents in the high season, and in some cases all year round, enabling you to easily cover mortgage costs.

City properties offer a safer year-round bet as it’s easier to continuously attract occupants off season, and you can always take advantage of the accommodation yourself, if you want to, as an added bonus. However, there are restrictions to “own use” in the tax rules – see below.

Tax Incentives for a Holiday Letting Business

Note, these rules can change – always check the latest rules on the valuable tax advantages

Holiday lettings is recognised as a business (generating earned income) by HM Revenue & Customs, unlike other forms of property letting which HMRC class as investment income (unearned income)

There are some valuable tax incentives for letting your property as a holiday home, but there are some exacting HMRC rules which you must follow:

– Your accommodation must be available for letting to the public for at least 210 days of the year and actual letting must be at least 105 days.

– Any one occupier (or group) cannot stay for more than 31 days in any period of seven months, but they can for the remaining five months.

– You cannot claim the tax incentives when you use the accommodation yourself, or when the property is not available for letting.

– The property must be fully furnished.

– The lettings must be at full market rent, not a peppercorn rent for friends and relatives.

– Your rental income is subject to income tax, but ALL expenses are allowable.

Allowable Expenses against Holiday Lettings Business Income

  • Repairs and maintenance
  • Decorating
  • Heating & lighting
  • Legal and letting agent’s fees
  • Management fees and cleaning costs
  • Insurance
  • Mortgage interest payments

Losses & Tax Advantages – Holiday Lettings Businesses

– In addition, if the business makes a loss, which it is likely to do in the early years, you can offset this against any other income you may have from any other source and thereby reduce your overall tax bill.

– Married couples can maximise tax allowances by having the property in the name of the lowest earner. This is particularly advantageous if the lowest earner is in the lower rate tax band and the higher earner is in the higher band.

– When you sell you holiday letting you will be subject to capital gains tax as you would if you sold a buy-to-let property, BUT at a more advantageous.

– You can avoid paying capital gains tax altogether if you invest the proceeds of your sale in another holiday letting property within 3 years – this is known as roll-over relief.

– Roll-over relief can also be used to avoid paying capital gains tax on sales of other types of businesses, where the proceeds are invested into a Holiday Lettings Business.

Your income and expenses for your holiday let business must be declared to HMRC on your annual self assessment tax return due any time from 31 October through to 31 January.

Mortgages for Holiday Homes and Lettings

One way to finance your holiday let is to increase the mortgage on your main residence.

Borrowing against your own home may mean you can buy a second home outright, or at least put down a substantial deposit.

Alternatively, you may want to buy an established holiday letting business from the owner which may include a portfolio of holiday cottages or town houses. Business finance is available from the banks.

Insurance for Holiday Homes and Lettings

In these days of higher risks and a litigious public, adequate insurance cover is vital. The types of cover you need to consider are:

  • Buildings cover – your mortgage company will insist on this
  • Contents cover – your own contents should be adequately covered, whilst your guests should cover their own contents and accidental damage to your property.
  • Public liability – covers you for civil actions brought by guests who may sustain injury on your property.
  • Employee liability – you are likely to employ casual labour in the process of running your small business and this cover is a legal requirement.
  • Loss of rental income cover – this can be had for a small percentage of the annual rental income.
  • Cancellation insurance – in case guests let you down.
  • Personal accident insurance – in case you are incapacitated at critical times.
  • Motor insurance for business use – you are likely to use you vehicle for the holiday letting business.

Holiday Letting – Bookings Scams

There have been many instances of holiday makers falling for bookings scams, but there have also been several instances of bookings scams on landlords reported recently. The aim of these is usually for the person booking the holiday to obtain your bank details, or sends a dud cheque / money order for more than the actual booking, then asks for a refund BEFORE the cheque clears. Always make sure the funds are in your bank before giving refunds and NEVER disclose you bank details.

©1999 - Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® - UPDATED: The attractions of Holiday Lets | LandlordZONE.

Source : Landlord Zone More   

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