Despite offering excellent opportunities for long term growth, property investing is an ever changing landscape and never more so than in 2020.

New rules and regulations are always coming into force and changing your potential returns and responsibilities as a landlord.

Here is our guide to things you need to know about the changing rules and regulations for buy to let and being a property landlord in 2020.

1. Mortgage Interest Tax Relief Changes

Since 2017, the Government has each year been reducing the amount of mortgage interest you are allowed to deduct as tax relief.

It’s been cited as a reason for many landlords to exit the buy-to-let market.

As long as there are no major changes in this year’s budget, then at the start of the 2020-21 tax year you’ll only be able to subtract a flat 20% of your mortgage expenses from your rental income when filing your tax return.

Make sure you take this into account when doing your projections.

2. Changes to private residence relief

From April 2020 a loophole will be closed that lets you can claim up to £40,000 in capital gains tax relief if you let a property that is, or has been, your main home.

This applies even if you haven’t lived in it for a while.

From April landlords will need to be living in the property in shared occupancy with the tenant at the time of the sale to claim the relief.

This could hit smaller landlords in the pocket considerably so make sure you aware it if effects you.

3. Energy efficiency rules

Another change in April 2020 will see the new Minimum Energy Efficiency Standard (MEES) regulations requiring rented homes to have a minimum Energy Performance Certificate (EPC) rating of E.

If your property doesn’t meet the regulations then Rio must carry out energy efficiency measures up to a cap of £3,500 a property.

The rules were introduced in 2018, but only covered new tenancies and renewals. In 2020 they will apply to all tenancies.

4. Stamp duty

In 2016, when the government introduced a 3% buy-to-let stamp duty surcharge for property investors.

It is widely believed that in this years budget a new stamp duty surcharge could be brought in for foreign buyers investing in UK property (rumoured to be 3%).

5. Leasehold reforms

The government’s attempts to stop unfair leasehold practices could finally take effect in 2020.

This may involve the banning of new houses being sold as leasehold, and also caps on service charges, permission fees and ground rents.

This uncertainty means you should pay particular attention to the tenure of your properties if you plan to expand your portfolio in 2020.


At M3 Commercial Finance we can help you secure property finance. Contact us today for an informal chat about your needs.

Contact us today to discuss your needs.

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