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Homeowners will be able to add two storeys to their property

Homeowners, buy-to-let landlords and property developers could be given the go-ahead to build upwards by two storeys to extend their property.

Secretary of State for Housing, Communities and Local Government, Sajid Javid, said the government will make planning guidance more flexible in order to help fix the broken housing market and boost supply of housing stock.

The move could also ease pressure on the green belt if it becomes easier to build upwards in towns and cities.

Homeowners would still need planning permission to build two extra storeys under the proposals, but guidance to local authorities is likely to be changed, so they are encouraged to approve such applications.

Mark Hayward, chief executive of NAEA Propertymark, said he welcomed any move to create housing stock. “The market is in crisis with a severe lack of available properties, which is pushing prices up and pricing first-time-buyers (FTBs) out of the market.

“The fact that this will enable existing residential areas throughout the UK to expand is especially welcome, as it should increase stock in the areas which most need it, rather than being confined to more expensive urban areas.”

Paresh Raja, CEO of Market Financial Solutions (MFS), added that landlords and property developers could also take advantage of the more relaxed guidance, creating more rented accommodation, and benefitting tenants.

“In this sense, recent reforms to housing planning rules are a definite step in the right direction, and I believe this will have positive ramifications,” he said.

“Buy-to-let landlords can now consider adding additional storeys to their property, increasing the number of rental spaces on offer. At the same time, property developers can also look to build a further two storeys on existing developments, increasing the number of houses available on the market.

“Ultimately, this type of reform will only contribute to housing supply and will help alleviate current market demand.”

Source: Your Money

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Buy To Let Mortgage Guide For Expats

Buy to let mortgage rules have tightened up for new landlords as well as seasoned investors.

If you are an expat looking to buy or refinance in the UK, then you need to know how the new rules will impact your business.

Deposits – the more an investor ploughs into their investment, the lower the financial risk for the lender, so mortgage interest rates decrease.

Expect to put down at least 20% of the property value – and 40% if you want the very best interest rates.

Fees and other costs – lenders will charge an arrangement fee on completion and possibly a booking fee for a fixed rate deal. The costs vary between lenders, so make sure you ask when working out the buy to let purchase cost

Stamp duty – landlords pay enhanced stamp duty, which is the rate someone who buys a home to live in pays plus 3%. This online stamp duty calculator will work out how much you should pay

Interest only – many buy to let mortgages are borrowed as interest-only deals. Since April 2017, HM Revenue & Customs has started to phase in restricted mortgage interest relief for higher rate taxpayers.

By 2020, instead of offsetting all mortgage interest against tax, landlords will only be allowed a 20% allowance regardless of the rate they pay income tax

Income assessment – this depends on if you are an amateur or portfolio landlord.

An amateur landlord typically has one or two buy to lets or rents out a home they once lived in. lenders will consider affordability against total income rather than on rent generated by a letting property.

Portfolio landlords have four or more buy to let properties and will have the rent and costs of each property assessed, but the final decision will be based on the projected rental income of the property to be mortgaged.

Rent cover – this is a calculation based on the interest paid on the mortgage and the likely rent a tenant will pay. Typically, rent cover is 140% of the annual interest charge at the lender’s standard variable rate, but the cover rate can vary between lenders.

If the rent cover figure is below the cost of the mortgage, the lender will probably make a reduced offer, leaving the landlord to find a bigger deposit.

Source: Money International

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Expat Landlords Urged To Catch Up With Tax

If you are a British expat letting out a home while living overseas, you could be in for a nasty tax shock.

HM Revenue & Customs is warning landlords collecting rent from buy to lets or shared houses in multiple occupation (HMO) that they should declare any rental profits or capital gains on selling a property.

To make the process easier, HMRC is offering landlords the chance to join the Let Property Campaign to bring their financial affairs up-to-date if they have neglected to file tax returns in the past.

Am I a non-resident landlord?

You can find out by answering some simple questions:

  • Have you rented out or currently rent out property in the UK?
  • Is the property residential, ie a house, flat, HMO, or a permanently sited caravan or houseboat rented out on an assured tenancy agreement?
  • Do you live outside the UK for more than six months at a time?

If the answer to these is ‘yes’, then you are probably a non-resident landlord.

Why should I declare my rental profits or gains?

HMRC promises the best settlement terms to landlords taking part in the Let Property Campaign.

Not taking part means risking higher penalties if HMRC finds out an expat has let a property without declaring the income.

Penalties for landlords dealing with undeclared profits or gains outside the Let Property Campaign have a 100% surcharge, so expats could pay twice as much tax as they owe.

How will HMRC find out I am a landlord?

If you have a mortgage, employ a letting agent, advertise the property for rent online or have tenants with benefits, then HMRC probably already knows you are a landlord and has you on a list of potential tax avoiders.

This information is collected from lenders, letting agents, local councils and online property portals by default.

I’ve spent the tax and can’t afford to come forward

Unfortunately, that is not an excuse for not paying any tax that you may owe.

However, HMRC pledges to come to an agreement for paying tax from previous year, so long as the offer is reasonable and the payments are maintained.

Source: iExpats