2020 has been a year of unprecedented change, and the tax landscape is no exception. Private landlords have been affected by a number of changes to the tax system, and it’s important to understand how these changes will affect your business. This article will provide an overview of the 2020 tax changes for private landlords, so you can make sure you’re up to date on the latest regulations.
One of the most significant changes for private landlords is the introduction of the new ‘Rent a Room’ scheme. This scheme allows landlords to earn up to £7,500 per year in rental income without paying any tax on it. This is a great way to reduce your tax bill and can be especially beneficial for those who rent out a room in their own home. However, it’s important to note that this scheme only applies to residential properties and not commercial ones.
Another important change for private landlords is the new ‘Renters’ Relief’ scheme. This scheme allows landlords to claim up to £1,000 in tax relief for each tenant they have in a property. This can be a great way to reduce your tax bill and can be especially beneficial if you have multiple tenants in one property. However, it’s important to note that this scheme only applies to residential properties and not commercial ones.
In addition, private landlords should also be aware of the changes to the Stamp Duty Land Tax (SDLT) rates. The SDLT rate for residential properties has been reduced from 3% to 2% for purchases up to £500,000. This is a great way to save money on your property purchases, but it’s important to note that this only applies to residential properties and not commercial ones.
Finally, private landlords should also be aware of the changes to Capital Gains Tax (CGT). The CGT rate for residential properties has been reduced from 18% to 10% for gains up to £12,300. This is a great way to reduce your tax bill, but it’s important to note that this only applies to residential properties and not commercial ones.
Overall, 2020 has brought a number of changes to the tax system for private landlords. It’s important to understand how these changes will affect your business so you can make sure you’re up to date on the latest regulations. By taking advantage of the new ‘Rent a Room’ scheme, ‘Renters’ Relief’ scheme, and reduced SDLT and CGT rates, you can reduce your tax bill and ensure you’re making the most of your rental income.