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Landlord

A landlord is a property owner who either rents or leases their property to another party in exchange for rent payments. Landlords can be individuals, businesses or other entities, and they are required to provide the necessary maintenance and repairs of the property during the rental period. The leaseholder or tenant is responsible for keeping the property clean and for general upkeep. 

What responsibilities does a landlord have?

Besides the general wear and tear maintenance of the property, landlords also have a few rules and regulations to follow. They are responsible for looking after the following:

  • Gas safety: you must ensure that the gas equipment in the rented property has been installed and maintained by a registered Gas Safe engineer. They must also make sure that an engineer does an annual gas safety check on these appliances 
  • Electrical safety: you should ensure their property’s electric system is safe, including wiring, fittings and any appliances
  • Fire safety: you must install a smoke alarm on each floor of the rental property, as well as providing a carbon monoxide alarm. There must also be access to escape routes at all times, and furniture and furnishings must be classified as fire safe
  • Energy efficiency: you must get an energy performance certificate when they let their property to new tenants. All rental properties must achieve a minimum EPC rating of E 
  • Right to Rent: you’re required to carry out Right to Rent checks when setting up a new tenancy agreement. They must also check that tenants have the right to live in the UK by checking and making copies of their immigration documents or passport 

Do landlords pay tax?

Unfortunately, yes. You’re responsible for paying multiple taxes. You pay Stamp Duty when buying your property, and then Capital Gains Tax when selling it. Depending on how you acquire the property, you may also owe Inheritance Tax.

As a landlord, you also pay tax on your net rental income. This is your total income, minus any ‘allowable expenses.’ These expenses can include:

  • Professional fees
  • Mortgage and Property Loan interest
  • Ground rent
  • Utility bills; energy, water
  • Council tax
  • Property Maintenance and Repairs
  • Landlord insurance

You’ll also need to pay Class 2 National Insurance (NI) on your rental income if:

  1. HMRC decides that you have “a property business”
  2. Your profits are over £6,515 per year

Landlords can pay Income Tax and NI by filing a Self Assessment tax return, which we (at TaxScouts) can do for you completely online.

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