10 August 2018
Selective Licensing – How will your investment properties be affected?
From 1st August 2018, Nottingham City Council introduced a new licensing scheme that will affect landlords in most areas of the city. From that date, landlords will be required to obtain a licence for each property they let, to make sure it meets the required safety and quality standards for tenants.
There has been much hype in the press over this move, but there is a small silver lining for landlords - the licence fee is tax deductible.
Find out how your property portfolio could be affected.
What does Selective Licensing mean for landlords and property investors?
The scheme requires that private landlords or property managers hold a licence for each individual property that they receive rental income from. It is intended to improve safety and quality standards in the private rented sector.
The new Selective Licensing scheme does not cover all areas of Nottingham city. It’s estimated there are over 30,000 privately rented homes within the designated area, so it is paramount that landlords and property managers check with their local authority to see if their properties fall within the scheme.
At the time of writing, areas included in the Selected Licensing Scheme are: Arboretum, Bestwood, Bulwell, Bulwell Forest, Basford, Berridge, Bridge, Clifton North, Clifton South, Dales, Dunkirk and Lenton, Leen Valley, Mapperley, Radford and Park, Sherwood, St Ann’s, Wollaton East and Lenton Abbey.
Selective Licence requirements
The scheme requires that private landlords or property managers hold a licence for each individual property that they receive rental income from.
A landlord will need to supply the following when applying for a licence:
- Proof of right to live in the UK
- A valid, in-date gas safety certificate for all appliances in the property
- An Energy Performance Certificate (EPC)
- Evidence of landlord insurance for the property (this includes public liability insurance).
- Relevant fee per property [Click here for details of full Table of Fees for Selective Licensing]
Get your property paperwork in order
Additional information you may also be asked for when making a licence application includes:
- Emergency Escape Lighting Test Certificate (if this is present in the property)
- Fire Alarm Test Certificate where there is a fire alarm control panel
- Most recent portable appliance test (PAT) certificate (If portable appliances are provided by the landlords)
- Building regulations completion certificate and planning consents (if applicable)
- Written Fire Safety Risk Assessment (f applicable) and evidence of relevant training (if undertaken).
How much does a Selective Licence cost?
Licences will cost landlords with Nottingham Standard accreditation £480 (if you applied for it via DASH or Unipol before 1st August 2018) or £780 if you haven’t got accreditation. This cost is per property. However, as mentioned earlier, as the licence is wholly and exclusively for the purposes of trade, it is an allowable expense and so is tax deductible.
Exemptions from the Selective Licensing Scheme
If you are in the process of selling your property and it falls within the designated area, you can apply for a temporary exemption notice (TEN). A temporary exemption notice lasts for three months and you can renew for an extra three months in special circumstances. If the property still needs a licence after this period of time, you must apply for a property licence straight away.
Need advice for your property portfolio?
While we of course agree that everyone in Nottingham should have somewhere to live that meets decent and safe standards, there is no doubt that Selective Licensing is causing controversy and confusion for landlords and tenants throughout the city of Nottingham.
If you are unsure about your property tax obligations or what you can claim back as a landlord, contact our property team on 0115 964 88666 or email email@example.com today for support.
The views provided in this article are for general information purposes only. Nothing in this article represents advice of any nature whatsoever. Accordingly, RWB CA Limited does not accept any liability or responsibility for the information contained in this article or any decision or other action that may be taken in reliance upon the information contained within it. RWB CA Limited accepts no responsibility for any errors of fact or opinion and assumes no obligation to provide you with any changes to its assumptions.