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Scrapping of wear and tear allowance will affect almost half of landlords

47% of landlords will be affected by the removal of the annual wear and tear allowance, according to research from the National Landlords Association (NLA).

Currently 24% of landlords let their properties fully furnished, with 22% letting a mixture of furnished and unfurnished properties, whilst 53% of landlords let their properties on an unfurnished basis.

Chris Norris, Head of Policy at the NLA, said: “We fully understand the frustration of those landlords who let exclusively on a furnished basis, as the removal of this allowance (in the recent Budget) will very likely represent a reduction in the relief they can claim.

“However, it will come as a welcome revision for those letting a mixed portfolio, unfurnished, or part-furnished property as the replacement system will allow them to deduct legitimate revenue expenses in the future.

“The NLA has broadly welcomed these proposals as it should lead to a fairer system for more landlords. However, as we transition from one system to another, we will push to make sure that any landlords who’ve made recent investments with the expectation of offsetting the cost over a number of years using the current allowance, will not be disadvantaged”.

The Government has scrapped the old system, which is only available for furnished properties, with the new tax relief system enabling all landlords to deduct the costs they actually incur on replacing furnishings in the property.

The new system will apply from the 6th April 2016, but it is under consultation until the 9th of October 2015, and will cover the cost of replacement furniture, furnishings, appliances and kitchenware provided for tenants including:

  • Movable furniture and furnishings
  • Televisions
  • Fridges/freezers
  • Carpets and flooring
  • Curtains
  • Linen
  • Crockery or cutlery

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