Published on 22 May 2016
Hannah McCartan of https://www.mccartanlettings.co.uk talks about the wear and tear tax allowance changes landlords in Swansea need to consider when letting properties.
From the 6th April this year (2016) one of the biggest changes to come into effect is that the ‘wear and tear’ allowance for furnished properties has been taken away.
Which essentially means that landlords won’t be allowed to claim 10% on their tax returns for the property that was furnished.
The government are trying to encourage landlords to invest more in their properties by raising the standards of the furnishings and the appliances n their property.
Although you will not be able to claim your 10% after April 6th 2016 f you replaced or purchased a bed and mattress then the full purchase amount is can be offset in your tax return.
However, as a landlord what you need to realise is that to get the same tax breaks you had been receiving before you will now have to spend 10% of the rental income on replacement furniture and fittings.
So for example, f your rental income for the year on your property was £6000 you would have to spend £600 on replacement furnishings and appliances to get the equivalent ‘wear and tear’ allowance.
Landlords need to consider how this will affect them and how they will use the tax change to plan for the future.