TAXATION Tax changes hit overseas holiday homes
Government proposals on changes to the tax rules on furnished holiday lets (FHL) will
also apply to the owners of properties in the European Economic Area if they are UK tax payers, warns accountants James Cowper. The changes proposed for April 2011 bring the taxation of FHL into line with EU law, whilst at the same time limiting the effect on the holiday industry, and include: An increase in the number
• •
of days a property needs to be let before it can qualify as a FHL. This will restrict the extent that owners will be able to use their second home and still retain the tax breaks. Removing the ability to
offset expenses against other income. Stephen Barratt, private
client director at James Cowper said, “Currently a property only has to be let for 70 days and be available for 140 days to qualify for tax breaks under the FHL rules. These had been due to be scrapped from April 2010 but were saved in the Emergency Budget on 22 June. If the current proposals are implemented, the tax breaks will be restricted or removed altogether as the letting requirements rise to 105 and 210 days respectively. “Many in the industry think
this is a way of penalising second home owners and it could force many to sell their
properties before April 2011. If many people come to the same conclusion this could see a glut of properties on the market in holiday hotspots in the UK and overseas.” The headline rate of capital
gains tax is 28 per cent for higher rate taxpayers and 18 per cent for basic rate payers, but the profit on a sale of a FHL generally attracts a rate of just 10 per cent. There might also be an element of main residence relief in the case of a second home where the necessary tax election has been made. Depending on the timing of the sale, it might be that a sale after 5 April 2011 will still qualify for the 10 per cent tax rate.
SOFTWARE Letting made easy
A Brighton- based letting agent has come up with a simple idea for a new letting software
product – keep it simple! Jo-Blaise Martin (pictured) who
has designed the software says, “Any agent choosing a software package may find themselves a little baffled by the complexity and price of many of the options available. Many contain gimmick features that sound attractive but will you really use them on a day to day basis?”
i2let software has been written
specifically to incorporate an agent’s daily needs without, what i2let describes as ‘unnecessary bells and whistles’. “Simplicity has been our driving factor and has proved time and time again to suit agents,” says Jo-Blaise. “I2let has been designed by a letting agent and therefore someone who is in the position of the actual person dealing with an average day in a letting agency, allowing them to move from a current maintenance list to a negotiator letting list very easily, making notes in easy to use notes boxes so that even with limited communication a colleague can know exactly what the situation is with a maintenance issue or a late rent.”
www.i2let.com
RURAL Farmhouse hot spot revealed by new index
A new property index launched at the CLA Game Fair reveals the hot spot for one of the most
desirable property types in the UK – a spacious farmhouse with land. The area most valued by house
hunters is the belt formed by central and northern Hampshire, with south western Berkshire. The index takes a notional five bedroom house with five stables, a three bay garage, outbuildings, and about five acres, comparing typical values for a three month period across the residential offices of Carter Jonas.
Left: Richard Liffiard. Right: Catherine Penham
Its Andover, Basingstoke, and Newbury offices shared an average value in March of £2.2 million, with Winchester just behind at £1.9 million. By June, Andover’s was £2.5
million. Newbury and Basingstoke remained static while Winchester, ,
saw values rise by £400,000. “While the property type is notional in order to get a benchmark, the prices for each office are based on properties marketed in the quarter,” says Richard Liddiard, national head of rural agency. “Four offices saw a rise in values, only Long Melford in Suffolk, saw a drop. The other10 offices saw prices stay static”. Catherine Penman said her research underpinned the serious interest in rural property. “This is one of the two most highly sought asset classes in the current climate, the other is gold!”
Agents’ words of wisdom
Do you have something to get off your chest? Or a great idea that you’d like to share? Perhaps you have one simple initiative that has made a big difference to your business. Why not tell all
PROPERTYdrum’s readers? We’ll send a bottle of champagne for the best tip each month! Email:
sheila@propertydrum.com
PROPERTYdrum SEPTEMBER 2010 11
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68