Investment Property News

Property Tax – CGT Changes


A major change in the reporting and payment of Capital Gains Tax (CGT) on UK residential property disposals took place on the 6th April 2020.

It is now necessary within 30 days of completion of sale to submit a provisional calculation of any gain to HMRC and pay any tax that is due.  Ultimately the gain will still be recorded on the tax return and any over or under payment of tax dealt with in due course.  If tax is overpaid then this will not be repayable until the tax return is submitted. Prior to this date CGT was recorded on an individual’s personal tax return and tax payable on the 31st January following the end of the tax year.

If a property, say a buy to let investment, is sold on the 31st May 2020 any gain should be reported and CGT paid by 30th June 2020.

Note that the new 30-day reporting and payment obligation will not apply where no tax is payable such as the disposal of your principal private residence or a sale at a loss.

The HMRC website provides further information.

If you are considering selling your property and wish to know how we can help, call 0131 473 1591, or use our online contact form.

Additional Dwelling Supplement – Guidance for Investors


From the 25th January 2019, the rate at which Additional Dwelling Supplement (ADS) is charged in Scotland will increase from 3% to 4% for those buying a second home, rental property, or residential property that is in addition to their primary residence.

Where the ADS applies, there is a further 4% charge on the full chargeable consideration added to the Land and Buildings Transaction Tax (LBTT) liability for certain transactions with a relevant consideration of £40,000 or more, where the subject-matter of that transaction consists of or includes the acquisition of ownership of a dwelling in Scotland.

The ADS payable for a residential property transaction within the scope of the additional amount of LBTT will therefore be charged on the whole relevant consideration for that transaction.

Our investor clients can calculate ADS along with LBTT using this Tax Calculator.

Before and After – Property Makeover


The Edinburgh rental market is currently tilted in favour of landlords but if a landlord presents and dresses a property to look at its best then rents will be maximised, voids minimised and a better quality of tenant will be found who in turn is likely to stay for longer.

More than 80% of tenants start their search online so it is crucial that high quality pictures and floor plans are used to ensure that the property stands out. For a little investment landlords can increase rentals and at the same time add the cost of the upgrade to the value of their investment.

Presenting Your Rental Investment

An example of how to present your rental investment and the asset management we have just carried out for a client is shown below.

  • Purchased July 2018
  • Purchase price of £130,000 with Home Report value £130,000.
  • £5,000 spent on upgrade.
  • Let within 24 hours of being advertised at £750 pcm.
  • Gross yield 6.6%
  • Current Market Valuation £150,000
If you want to maximise your buy to let investment then call 0131 473 1591 or use our online contact form.

Edinburgh – Top UK City For Growth


The latest figures from Hometrack show that the inflation rate across the nation’s cities sits at 5.2%. Although London has taken a hit slowing down to 1% growth, five regional cities have enjoyed an annual price inflation of over 7%.

Edinburgh tops the list with an 8% inflation growth year on year, up from 4.4% last year. It is closely followed by Liverpool (7.8%), Birmingham (7.7%), Leicester (7.7%) and Manchester (7.1%).

Birmingham, Leicester and Manchester were all slightly under 7% growth last year and this year are all above the 7% mark. Both Edinburgh and Liverpool had middle of the pack growth rates last year, but this year have the highest increases in inflation across UK cities.

The average growth across all 20 cities sits at 4.1%, while the UK’s average as a whole is 4.3%.

To read the full report, click here.

PRT – Landlord View


The Private Housing (Tenancies) (Scotland) Act 2016, which takes effect from 1 December 2017, will introduce the ‘private residential tenancy’. Its purpose is to improve security for tenants and provide safeguards for landlords, lenders and investors. We have studied the changes and below covers the landlord view.

The new tenancy will be open-ended and will last until a tenant wishes to leave the let property or a landlord uses one (or more) of 18 grounds for eviction.

Improvements for landlords include:

  • no more confusing pre-tenancy notices, such as the AT5
  • where a tenant is in rent arrears, a landlord can refer a case for repossession more quickly
  • a Scottish Government recommended ‘model tenancy agreement’, which will include standardised tenancy terms
  • a digital version of the Scottish Government ‘model tenancy agreement’, which will include discretionary terms that can be edited, allowing landlords to easily put together and send out a tenancy agreement suitable for their specific property
  • one simple notice when regaining possession of a property called a ‘notice to leave’ – this will replace the current ‘notice to quit’ and ‘notice of proceedings’
  • eighteen modernised grounds for repossession, which include new grounds where the property has been abandoned or the landlord intends to sell

In our opinion the introduction of Private Residential Tenancies is simply a legislative change which landlords should not be overly concerned with.

The Scottish Government website provides further information.

To find out more about letting your property in Edinburgh, call our letting team on 0131 473 1591, or use our online contact form.