Property Archives - CruseBurke

News,May 2018

Reclaiming VAT on Property Development for Healthcare Professionals

George22/04/2026Healthcare , Property , VAT

The biggest investment a healthcare practitioner will probably ever have in their career is a new clinic or the renovation of a care home. While the vast majority of medical services are exempt from VAT, construction costs usually attract the full 20% rate. This is often described as a “hidden cost”. Unfortunately, many practices miss out on reclaiming this tax simply because they don’t plan ahead. However, reclaiming VAT on property development is entirely achievable. The secret is to identify the correct rules and apply them before your project actually begins. In this guide, you will learn: Qualifying healthcare buildings for zero-rating Why do some clinics pay the full 20% VAT rate What happens if the use of the building changes? And much more… Let’s break it down! Is VAT on Property Development the Same for Everyone? The rules surrounding reclaiming VAT on property development change quite a bit depending on what you are building. A typical commercial developer building offices or retail space will usually face a standard 20% VAT rate on construction. To offset this, they “opt to tax” the property. This allows them to reclaim the VAT from HMRC, but it also requires them to charge VAT on future rents or sale prices. For healthcare professionals, it’s a bit different. Because most medical services are exempt from VAT, healthcare providers often can’t “opt to tax” or reclaim VAT in a traditional way. This is why the specific healthcare reliefs like the zero-rate for care homes are so important. They allow you to get the same 20% saving as a commercial developer, without the worry of charging VAT to your patients or residents. How Healthcare Property Development Differs From Other Sectors The tax treatment of property in the healthcare sector is largely driven by social policy objectives. This is because the government wants to encourage certain types of building projects over others. For example, the construction of new purpose-built care homes for the elderly or disabled is generally zero-rated for VAT. Zero-rating allows developers to receive construction services at a 0% VAT rate. However, you should note that professional fees, such as architect or surveyor costs, are always standard-rated at 20%. To manage this, developers often use Design and Build contracts. Under this arrangement, the contractor provides a single, unified supply of construction services. This specific structure allows the design costs to be treated as part of the zero-rated building works rather than as separate professional fees. Consequently, reclaiming VAT on property development becomes much more efficient because the 20% tax burden is effectively removed from the professional services element. In contrast, the construction of a hospital is treated differently. These projects are usually subject to the standard 20% VAT rate because hospitals are specifically excluded from the “Relevant Residential Purpose” relief. Zero-rating is only possible if the building is used for a “Relevant Charitable Purpose”. However, this is very difficult to achieve in practice, as the facility must be used by a charity solely for non-business activities. Reclaiming VAT on Property Development for Healthcare Professionals The process of reclaiming VAT on property development for those in the healthcare sector is unique because most medical businesses cannot traditionally recover VAT. If you run a GP or dental practice, most of your income is likely VAT-exempt. While this means you don’t charge patients VAT, it also limits your ability to reclaim VAT on your costs. However, if you have taxable income from private work or dispensing, you may be able to recover a portion of your VAT through partial exemption rules. Due to this reason, the “reclaim” occurs via a series of specific reliefs. For example, if you were to construct a new residential care home, then there are specific provisions in the law that enable the construction services to be zero-rated. As a result, your builder will charge 0% VAT on their labour and any qualifying building materials they supply and install as part of the contract. You aren’t getting a cheque back from HMRC; instead, you are simply not paying the 20% tax in the first place. This can be a massive advantage to your project’s cash flow, as a £1 million build could suddenly be £200,000 cheaper. Qualifying Healthcare Buildings for Zero-rate Not every healthcare facility qualifies for zero-rated VAT treatment, which is a major hurdle when reclaiming VAT on property development. To obtain the zero-rate, the construction must meet the specific legal definition of a “Relevant Residential Purpose” (RRP) or, in specific cases, a “Relevant Charitable Purpose” (RCP). Under these rules, the following buildings typically qualify for the 0% VAT rate on construction: Residential Care Homes: Facilities providing 24-hour personal care and accommodation for the elderly or those with disabilities. To qualify, the building must be used solely for the provision of residential care and accommodation for the residents. Hospices: Buildings specifically used for the care of the terminally ill. Under RRP rules, these qualify for zero-rating regardless of whether the operator is a commercial business or a charity. Children’s Homes: These include residential homes providing both care and accommodation for children (under 18) in need of care, such as orphans or those with disabilities. However, the zero-rate does not apply to any facility used as a hospital, prison, or similar detention centre. Charitable Healthcare Buildings: New buildings used by a charity strictly for non-business purposes (Relevant Charitable Purpose). This typically includes facilities like free community clinics or research centres where no fees are charged to patients. Note: Hospitals are explicitly excluded. A hospital can only be zero-rated if a new building is constructed for a charity to be used solely for non-business activities. Most private or commercial hospitals must pay the standard 20% VAT on construction services. When the 5% Reduced Rate Applies to Your Project If you aren’t building from scratch, you might still save a lot of money through the 5% reduced rate. This is common when you are changing the way a building is used, which can significantly alter the strategy for reclaiming VAT on property development. …

How to Avoid Capital Gains Tax on Commercial Property UK?

Chris09/10/2025capital gains tax , Property

The idea of the sale of a business asset may prove to be an ingenious move in your business, yet it is frequently subject to tax by HMRC. If you have made a profit called capital gains on commercial property, you are likely to pay capital gains tax on commercial property. In the UK, it might cost you on your tax return, as high as 24 percent of your profit. However, there are legal ways of reducing this tax or even avoiding this tax altogether. We will discuss useful measures of how to avoid capital gains tax on business property in this guide. It includes reliefs and the exemptions required. When you do, you are going to have a clear plan on how to keep more of your hard-earned profit. Talk to our best accountants and bookkeepers in the UK at CruseBurke. You will get instant help with capital gains tax on commercial property. What is Capital Gains Tax on Commercial Property? When you sell a commercial property, like an office or warehouse and make a profit, you’ll have to pay Capital Gains Tax or CGT for short. Basically, it’s a tax on your gain, not the whole sale price. You work it out by taking what you originally paid for it plus any money you spent on major upgrades, and subtracting that from your sale price. Things like shops, offices, and warehouses don’t get the same tax-free pass that your main home might get. For example, imagine you bought an office block for £400,000, put in £20,000 for a refurb, and later sold it for £500,000. After knocking off about £5,000 in selling costs, your profit comes to £75,000. Now, for the 2025/2026 tax year, you get to keep the first £3,000 of that tax-free, so you’d only be taxed on the remaining £72,000. While there’s no way to completely avoid this tax, the good news is that HMRC has special reliefs and allowances, especially if the property is part of a business. Getting to grips with these is your best bet for keeping your tax bill as low as possible. Current CGT Rates and Allowances for 2025/26 For the 2025/26 tax year, the annual Capital Gains Tax (CGT) exemption is £3,000. The tax rates that apply to gains over this amount are determined by your income tax band: Basic rate taxpayers pay 18% on their gains. Higher and additional rate taxpayers pay 24%. There is also a reduced rate for certain business assets: Business Asset Disposal Relief (BADR): For qualifying gains, the rate is 14% from 6 April 2025. This rate will increase to 18% from 6 April 2026. Key Strategies for Avoiding Capital Gains Tax on Commercial Property Tax planning involves making use of the rules and reliefs provided by HMRC to minimise your tax liability Here are a few strategies to avoid capital gains tax on commercial property in the UK: Use Your Annual Exemption Wisely Start small but be prudent. All of you are entitled to a £3,000 tax-free exemption annually. If your commercial property capital gains are less than that, all is clear. If it’s higher, it decreases the amount liable to be taxed. How to make it effective? Time your sale to take advantage of unused allowances from previous years? Sorry, it can’t be carried forward. But if selling multiple assets, distribute them over tax years (6 April to 5 April). For example, by selling one asset in March 2026 (2025/26 tax year) and another in June 2026 (2026/27 tax year), you can utilise the annual exemption for both years. Set Your Losses Against Your Wins Got a losing investment elsewhere? Convert it into a tax shield. Other asset losses, e.g., shares or other property, can be used to offset your commercial property capital gains. Eligibility: You can offset losses realized in the same tax year, or carried forward from previous tax years. There is no time limit for carrying forward allowable losses. Example: Suppose you make a £50,000 capital gain from a commercial property sale. If you have an allowable capital loss of £10,000 from a previous tax year, you can offset this loss against the gain. The gain is reduced to £40,000 (£50,000 – £10,000). After deducting the annual exempt amount (£3,000 for 2025/26), your taxable gain becomes £37,000. Using this loss effectively reduces your potential CGT liability. Business Assets Relief Disposal (BADR) Claim Let’s talk about something called Business Asset Disposal Relief, or BADR for short. Honestly, it’s a huge deal for most business owners out there. What it does is slash the Capital Gains Tax (CGT) rate you pay. So, if you sell something that qualifies in the 2025/2026 tax year, you’ll pay just 14% on the gain, rather than the higher standard rates. This special rate applies up to a total of £1 million in lifetime gains. Eligibility: The property you’re selling has to have been genuinely used as part of your trading business for at least two years before you sold it. We’re talking about things like your workshop, your office, your shop, not just a property you leased out to someone else as an investment. You also need to be a sole trader, a partner in a business, or own at least 5% of a personal trading company. Here’s how it works: You take that lower 14% rate and apply it to your eligible gain after you’ve used your £3,000 annual tax-free allowance. For instance, imagine you made a £200,000 profit that qualifies. You’d knock off that £3,000 exemption, leaving £197,000 as your taxable amount. At 14%, your tax bill would be £27,580. That’s a serious chunk of change less than if you had to pay the normal 24% rate! Defer Tax with Rollover Relief Are you ready to pay now? Business Asset Rollover Relief gives a chance to roll the gain to a different trade asset, deferring the CGT to the date of the subsequent sale of that second asset. Eligibility: Both the old …

What are the List of Allowable Property Expenses?

George11/03/2025Business , Property

Determining the list of allowable property expenses is crucial for calculating your taxes if you are a landlord in the UK. Maximising the profit and reducing the taxable residual income demanded a clear understanding of the list of allowable property expenses. In this article, you find out all the allowable property expenses when you are a private residential landlord. It also proves helpful to stick with the special considerations of the HMRC. Talk to our best accountants and bookkeepers in the UK at CruseBurke. You will get instant help about allowable property expenses. What are Allowable Property Expenses? Determination of the profit for paying tax requires the deduction of the business costs from the income; these are known as allowable expenses. It plays a key role in reducing the paying taxable income. Some common allowable expenses include insurance, utility costs, and fees that are deducted from your rental income. So a good understanding of these expenses is an excellent way to be sure to increase profit and not miss any deduction. Basically, it is considered the best strategy when it comes to the financial management that ensures compliance. To claim the list of allowable expenses proves significant in reducing tax ills by impacting the overall rental income. The calculation of taxable profit relies on allowable expenses because they help lower the amount of tax that landlords must pay. Payment deductions for rental income include necessary costs that include insurance premiums and utility expenses with management fee payments. The correct use of tax deductions enables landlords to achieve higher profits by following tax requirements. Proper management of permitted expenses provides essential financial benefits that directly impact profitability so it becomes an essential strategy to maintain profitable rental operations. List of Allowable Property Expenses for UK Landlords Knowing all the allowable expenses for UK landlords makes your business align and ensures financial progress by deducting the expenses from total payable tax amounts. Following is the list of expenses that increase your tax returns. Financial expenses Property upkeep and repairs Insurance costs Ground rent and service charges Council tax obligations Management and legal fees Salaries and wages Travel costs Administrative expenditures Financial expenses If the value of the purchase property increases while selling rental property, SGT tax must be paid under the Capital Gains Tax (CGT) Bill, landlords in the UK. However, they can deduct capital expenses or allowances related to the property during ownership. This helps lower the taxable gain and reduces the CGT amount. The expenses can be deducted from the tax bills as part of the financial costs. Purchasing and maintaining the property revolves around the financial costs. To lower the capital gain liability, financial costs can be claimed. These financial costs include loans and mortgages. 2. Property maintenance and repairs Another important point that is added to the list of allowable property expenses is maintenance of the property and repairs. Many repairs, such as removing electrical faults, office stationary item changes, leaking pipes and other appliance maintenance, can be deducted. Moreover, other maintenance expenses are wall washing, painting, carpet changes, and replacing floors, which are also important to consider. However, when claimed, all the expenses must include all the property maintenance and repair. 3. Insurance costs Through tax deductions, landlords can subtract their insurance premium costs. A landlord needs insurance coverage for their property, together with contents protection alongside the mandatory landlord insurance, which defends them from liability risks and provides protection against lost rental income. Tax liability decreases through the assessment of these expenses. 4. Ground rent and service charges The charges for ground rent and council tax paid for renting properties are deductible expenses for tax purposes. Although tenants normally handle property payments, landlords can still generate tax deductions for unoccupied periods. The majority of landlords miss this opportunity, yet it reduces their taxable amount. 5. Management and legal fees Management costs, as well as fees spent on legal services, qualify as deductible expenses for property landlords. The expenses for lease renewal and shorthold tenancy agreements, together with eviction procedures and both rent collection and accounting services, are tax-deductible. The initial property letting costs, together with long-term rental agreement expenses that exceed one year in duration, do not qualify for tax deductions. 6. Salaries and Wages The majority of landlords remain unaware that they can subtract property worker wages from their rental earnings before taxation. You can claim allowable expenses when paying wages to property maintenance workers, including gardeners or cleaners. The allowable deductions reduce your rental profit that is subject to taxation, ultimately resulting in lower tax liability. 7. Travel costs When you own a rental property, you can deduct expenses from trips made specifically for property inspections or meetings with tenants. Particular regulations define how these costs can be claimed. The deduction of travel expenses from home to office is only permissible when your rental business activities occur within your home. You have the right to deduct travel expenses from your office location to your rental property address. 8. Administrative expenditures The cost of postage, stationery and phone calls qualifies for deduction from your rental income. Renters can deduct advertising expenses they utilise to find new incoming tenants regardless of whether they use online or conventional methods. 9. Service charges Service charge costs for rental properties become tax-deductible for UK landlords when such expenses directly benefit the specific property. The expenses need to qualify as “service charge direct costs” since they relate exclusively to rental property maintenance services and management activities. Named service charge deductions allow landlords to reduce their income subject to tax and reduce their total tax amount. You can deduct all allowable property expenses when the costs are 100% used for your property business operations. License fees paid for House of Multiple Occupation properties can be incorporated into your property-related expenses when filing your tax return. The process of claiming these business costs will decrease your taxable income, thus decreasing the amount you need to pay in taxes. Understanding Capital and …

Can a Limited Company Rent a Residential Property?

George06/01/2025Limited Company , Property

Are you a property investor or working in the capacity of dealing with rental properties in the UK, we understand you might face unique challenges in the process of doing your business. One of the common queries in this regard is, ‘Can a limited company rent a residential property in the UK?’. If you are wondering the same, you have found the right page to get your answers. We have designed this comprehensive blog to answer everything that you need to know in this regard. Continue reading to explore more in this regard. Talk to our best accountants and bookkeepers in the UK at CruseBurke. You will get instant help with your accounting queries in Croydon. Understanding The Rules of Limited Company Property Rentals In the UK, one of the common ways to own and manage rental properties is through a limited company, especially in the case of property investors who aim to save on taxes and manage matters effectively. This will make it easy for the proper investors to manage multiple properties more easily and organically. Working through such a setup will bring in a lot of benefits, and if you have a large portfolio of properties in the UK, you have a scope here. Moreover, you need to be mindful of the UK rules and regulations when it comes to working through a limited company for rental properties as a pretty investor. This will not only keep you away from the common pitfalls, but you will also protect yourself from the penalties and other relevant fines. So, can a limited company rent a residential property? Well, yes, but you have to consider the set of rules designed by the government. Can a Limited Company Rent a Residential Property? People associated with the rental properties often can a limited company rent a residential property in the UK. The simple and quick answer is yes. It is possible to rent the printers through a limited company in the UK. Most of the property investors chose limited companies to do their operations to enjoy the benefit of limited liability as well as the simple structure of the business operations. This will lead to protecting the personal assets of the investors and the landlords in case there is an issue with the tenancy agreement in the UK. Furthermore, it is perfectly alright to rent properties in the UK through a limited company. However, the processing of the mortgage and financing, in this case, are different. Lenders often follow strict criteria in this regard. This leads to higher rates of interest, and the criteria requirements are tough to follow. This is because a limited company will have a different way of dealing with the tax rules on income and capital gains tax. However, this depends on your business situation, whether it will work in your favour or will add more challenges to your everyday tasks. Why Choose a Limited Company for Property Rental? Tax benefits are one of the major and primary reasons to rent parties through a limited company in the UK. In the case of landlords, the corporate taxes are lower than the personal income tax rates. This will lead to maximise your savings by renting the parties through a limited company. Other benefits that make landlords and investors choose an unlimited company are outlined and explained in the following. 1- Succession Planning and Inheritance Tax When you are operating a private limited company in the UK, it will take a lot of time to ensure that you adhere to the rules and regulations of the UK tax to stay compliant. This will lead to succession planning and focusing on inheritance tax as well. 2- Easier Portfolio Expansion If you want to have easy expansion and growth of your portfolio, choosing a limited company will help. The income you get from the rental property company can be easily reinvested in the business to buy more new properties. This will also help the investors to avoid higher percentages of taxes. 3- Limited Liability Can a limited company rent a residential property? Yes, this is very much possible. When you choose a limited company to carry out rental business activities, this leads to offering protection to the personal assets of directors, investors and landlords. This becomes very useful while you’re dealing with issues regarding tenancy agreements or unexpected property-related challenges. What are the Challenges of Renting Limited Companies? We ensure the benefits of property rental companies in the UK. However, there are still some challenges to consider in this regard, which are outlined in the following. 1- Increased Costs Renting properties through a limited company means that you can face the challenge of higher costs, this includes the following: Higher mortgage interest rates Higher deposit requirements Stricter lending criteria Increased accounting and administrative costs 2- Implication of Capital Gains Tax Limited companies may also face higher rates of capital gains tax. This can lead to an increase in the tax liability on property sales. 3- Implications of Stamp Duty Land Tax Limited companies may also face higher rates of stamp duty land tax. This will lead to an increase in the cost of purchasing a property. 4- Keeping Compliance with Regulatory Limited companies must keep compliance with UK regulations. This includes company registration, annual returns, and HMRC compliance. This is quite a time-consuming task and also requires expertise. 5- Challenges related to Financing and Mortgage Getting a mortgage from a limited company is very hard, even more than being an individual. You may also face higher interest rates, stricter lending criteria, and higher deposit requirements. The Bottom Line In conclusion, several people associated with the rental properties ensure ‘can a limited company rent a residential property in the UK‘. Through the discussion above, we can determine a simple answer to this is yes, properties in the UK can be dealt with by renting through the structure of a limited company. Many investors of the property and landlords choose a limited company because …

What is Property Income Allowance?

George05/01/2022Landlord , Property , Tax Issues

The income you earn from land or property, along with the rental income gained from renting a part of a flat or house (like a single room) is known as property income. It also includes income generated from caravans or houseboats. Similar to other incomes, it is also taxed in the UK, unless the property qualifies for reliefs or allowances. The amount of tax you need to pay on this income will be subject to your income tax band. In this blog, you’ll learn the what are tax rates for property income, what is property income allowance, when you can’t use this allowance and what records you may need to make a claim? Let’s explore! We save your time, money, and stress by handling all your finances and business problems in no time! Call us on 020 8686 8876 or email us today. What Tax Do I Need to Pay on my Property Income? The income tax band determines the rate of tax you need to pay. The rates of property income are the same as those of your personal. However, you may fall under the higher rate band if your property income and other income are added together. Here is the income tax you need to pay as per your income tax band: What is Property Income Allowance? It is a standard allowance or tax exemption on which no property tax is payable. Currently, in 2021-22, you get a tax free allowance of £1,000 a year (from 6 April 2017 onward). If your income is below this allowance, you don’t need to inform HMRC or declare any tax return. However, sometimes you need to complete a tax return even if your income is below £1,000. But, if it’s higher you need to declare your property income and complete a tax return. And you may need to file a tax return for other income. You must inform HMRC if: your property income is more than the property allowance from £1,000 up to £2,500 the property income is more than £2,500, you need to register for self-assessment Want to register for Self-Assessment? Allow us to do the hassle on your behalf. Save your time by filling out this form and let us handle everything! In case, your annual gross property income from one or more sources is over £1,000 you can still use these allowances, instead of subtracting any expenses or allowances. With this allowance, you can subtract £1,000 from your income as partial relief which should not be over your income. If you find that your expenses are over your income, you need to consider availing of expenses instead of the allowance. And, if you own property jointly, you’re each owner is eligible for the allowance as per the share of the rental income. When You Can’t Use this Allowance? You are not eligible to use the property allowance if you are making income from: employment (your employer/employer of your spouse/civil partner) a partnership where you or someone associated with you are partners a company owned or controlled by you or someone associated with you You are also not eligible to use property allowance if you: deduct expenses from income by renting a room in your own home, rather than availing Rent a Room Scheme claim the tax reducer for finance costs (such as mortgage interest for residential property) Records to Keep for Property Allowance You need to keep records of your income to claim for this allowance. Records may include: a spreadsheet of your income receipts copies of your invoices (both paper or electronic) bank statements emails indicating income earned bank deposit pay-in records statements from the company who make payment to you a diary/appointments book showing your income from the customers When Do You Need to Contact HMRC? You need to get in touch with the Income-tax helpline if: you don’t know whether you are eligible for this allowance or not you’re not registered for self-assessment and have paid tax via PAYE on some of your property income (you may be due a refund) Quick Sum Up So, that’s all about the property income allowance that is £1,000 for the year 2025-26. The tax you will pay on your property income would be the same as your personal income. However, you may fall within the higher rate tax band when your property and other income is combined. You don’t need to file a return if your property income falls below the property allowance. And make sure to keep records to provide HMRC with proof of your property income. Our property accountants are reliable and transparent. If you need any help with accounting, tax payroll, and other finance-related issues. We will solve your tax issues in no time and at an affordable price! So, contact us now! Disclaimer: The information is taken from the HMRC and is intended to provide general information.

Everything that you Need to know about Section 24 as a Landlord!

George07/12/2021Landlord , Property , Taxation

There are multiple cases in which we find the landlords confused about section 24. This is also known as the tenant tax. This basic guide will help you understand section 24 in a better way. Section 24 was introduced in April 2017 by the Government. If we explain in simple words, the right of deducting the mortgage and agreement fees is reduced due to section 24 which was happening before in the dealing of rental income. Because of this change in tenant tax, landlords tend to face higher taxes and pay more taxes than ever. However, before we delve into further discussion, we need to have a look at the points of discussion in this article: Reason for Introducing Section 24 Section 24 – How does it Work? How are Landlords Affected The Bottom Line Are you looking for a helping hand to solve the accounts that you are stuck with? How about you get our guys on a quick call. We love talking about taxes, payroll management and any opportunities that help you expand your prospects. Call us on 020 8686 8876 or email us today. Reason for Introducing Section 24: The rapid growth of the private rental sector is one of the major reasons why section 24 was introduced. There are certain reasons involved and some of them are discussed below as well: To slow down the pace and the moving tendency was a major purpose. Due to the foreseeable property bubble danger in 2015, the safer ways were taken because if the property bubble burst out this could cause serious damage to the economy of the UK. Ensure to remove the less professional landlords from the field by making hard rules to earn profit by letting the property. To boost the tenants’ stability in the market. Making it easy for first-time buyers to gain confidence in order to foothold for the first time in the ladder of property letting. More options of properties will be in the market for making good purchase options. Moreover, several professionals do not really agree with the purpose and rules of section 24 that go against the landlords and lower their pace of profits in the market. There is a view that this is making the landlords hike their rents in order to gain more and more profits to stay in the market and make their rental income stable as well. For those landlords who are still willing to be in the market, they are bound to try new ways and models to continue being part of the letting property business. Are you a landlord who is seeking professional help to know more? Give it a try and talk to one of our professionals today. Section 24 – How Does it Work? When it comes to the rules and functioning of section 24, the landlords’ rights are put to limit and they can’t offset finance costs at the time tax liability is being calculated. This makes the landlord pay more tax than before. This also means that the landlords who are in the higher tax bracket will face the loss of tax relief. This can further push them to the further tax bands as well. The increase in gross income means that it will affect student loan repayment, child benefits and tax credits etc. How are Landlords Affected: Landlords involved in finance costs are super affected by the implementation of the rules that are under section 24. This can include the following types of landlords as well: Accidental landlords Landlords who are working as an individual in the property business. The Landlords who are non-UK Residentials but have to let properties here are affected as well. The Bottom Line: Now that you have developed a better understanding of section 24 and how does it work, we can sum up the discussion by saying that there are serious concerns that prove how individuals in the letting property business can be affected by the rules of section 24 and this is further acknowledged by the professionals. However, if you intend to continue in the letting property, others are a chance to gain profits by trying multiple structures. We hope this article helped to provide fair information to develop a better understanding. Our accountants at CruseBurke are qualified and cost-effective! We save your time, money, and stress by handling all your finances and business problems in no time! So, allow us to do this at an affordable package! Disclaimer: This article intends to provide general information based on section 24 and relevant details.

What Is HMO? A Basic Guide for Beginners

George04/10/2021Finance , Landlord , Property

The landlords can have more occupants and earn more rental revenue by letting an HMO (House in Multiple Occupations). However, there are many rules and responsibilities like minimising size requirements, overcrowding, and licensing to HMO landlords. To know more about HMOs’ responsibilities, read this blog till the end. Talk to one of our chartered accountants in Croydon about the online accountancy services we provide. We are just a click away! If you want our service of managing HMO and its tenants, then feel free to contact us! What is HMO (House in Multiple Occupations)? It is a property that has three or more people who do not form a single household and typically share one or more bathroom, toilet, or kitchen facilities. According to the government, the households include singles, married or civil partners (couples), and carers & foster parents. For instance, three people who do not relate to each other in three rooms will make up three households, whereas a property with two couples (married or civil partners) will form two households. HMO can normally take the following forms: A guardian occupied property Shared houses Guesthouses Hostels Residential care homes Certain bed and breakfast establishments Bedsit accommodation Houses let to lodgers The Responsibilities for Letting an HMO As a landlord, you are required to fulfill your legal liabilities even if you let an HMO. These legal responsibilities include meeting energy efficiency rules and protecting deposits. However, the following are some additional responsibilities of the landlords of HMOs such as: Carrying out a gas safety check annually Ensuring the property is not overcrowded Maintaining as well as repairing facilities and communal areas Providing washing and cooking facilities and enough waste bins for many tenants in the property At least once every five years, checking the electrical installations Ensuring the fire risk assessment is conducted properly Installing heat detectors in kitchens and smoke alarms; hence, proper fire safety equipment should be installed. Our accountants at CruseBurke are qualified and cost-effective! We save your time, money, and stress by handling all your finances and business problems in no time! So, allow us to do this at an affordable package! Do You Require a License for an HMO? Every license will identify the total number of individuals for the occupation of the property. Moreover, it will also identify the number of years it will be valid. For an HMO, you need a license when in the property there are: Two or more separate households living Five or more tenants living Through your local council, you should apply for a license. The terms of the license will be set by the individual councils. You can ask your letting agent to apply for a license, or you can apply yourself. When applying for a license, a landlord has to inform the following different parties, and the details of these parties must be pass on to the council. The occupants who have more than three years left on the current tenancy The lender in case you have a buy-to-let mortgage The freeholder of the property (if any) Any other owners of the property Conclusion We hope now you have understood what is HMO and what are the responsibilities of an HMO landlord. Finally, we will conclude our blog by saying that managing all your properties by yourself is complex. So, if you want to grow your property portfolio, we recommend you take help from a professional letting agent to manage your house of multiple occupants (HMO). Are you looking for a professional letting agent? Then, look no other than CruseBurke. We are qualified, cost-effective accountants that will properly manage your HMO and its tenants at an affordable package! So, contact us right away! Disclaimer: This blog contains general information on what is HMO.