Aatif Malik, a renowned Tax Accountant, urgently calls upon resident and non-resident landlords and property investors to attentively consider the imminent Renters (Reform) Bill. This legislation, set for a second reading debate in the House of Commons, is predicted to significantly reshape the landscape of Tax on Rental Income, profoundly impacting Resident and Non-Resident Landlords and Investors.
A pivotal development in the private rental sector, the Renters (Reform) Bill is poised to enhance the rental experience for England’s 11 million private renters and 2.3 million landlords. Designed over a rigorous five-year collaboration among landlord and tenant groups, the Bill aims to achieve a progressive balance between landlord obligations and tenant rights.
A key aspect of the Bill is the introduction of the digital Privately Rented Property Portal, which is projected to streamline the communication process between landlords, tenants, and local councils. With increased transparency and direct access to relevant guidance and changes to requirements, this ‘one-stop shop’ Portal will benefit all parties involved in the private rental sector.
Under the impending legislation, it will become mandatory for landlords to register themselves and their properties on the Property Portal. Failure to comply with regulations may result in significant financial penalties. Repeated breaches or serious offences may prompt an investigation by the Fraud Investigation Service, a specialized division within HMRC that deals with cases where the loss to the exchequer exceeds £100k.
Mr Malik advises landlords and investors to comply with their tax obligations at this critical juncture. In his expert words, “The forthcoming Renters (Reform) Bill is a clarion call for landlords to ensure their financial and tax affairs are fully compliant. Waiting for a nudge letter from HMRC under the Property Let Campaign or Undisclosed Income could lead to penalties, affecting cash flow in an already economically precarious environment.”
The Renters (Reform) Bill also outlines the continuation of selective licensing to address areas suffering from poor housing quality, high levels of deprivation, and anti-social behaviour. The Property Portal will assist local councils in identifying poor quality and non-compliant properties, reinforcing the enforcement of standards.
Amid rising inflation, the cost of living and bank interest rates, penalties due to non-compliance can significantly burden landlords. This could lead to a mounting debt problem over the next few years, particularly for those who have yet to declare their income from property. As Mr Malik elucidates, “Preparation is the best defence. The current climate’s economic challenges mean landlords must understand and fully meet their obligations under the new reforms.”
The government anticipates launching the Property Portal in Autumn 2025, assuming the Royal Assent of the Renters (Reform) Bill is granted in early 2024. The prudent landlord who keeps their ear to the ground now will reap the benefits when these new laws take effect.
