What are the implications of selling the Property?
Capital Gains Tax is payable on the increase in value of a property since either 31st March 1982 or the last transaction on property that is not the principle private residence.
For this property, it has remained in the same condition and probably depreciated in condition since 31st March 1982. Capital Gains Tax will apply at 28% due to income (based on level of income tax paid).
How did you establish the GIA of the property?
When I reviewed the Property file, I noted that it had been included within an Estate review of EPCs. An EPC assessor had noted that the property’s GIA was 39.4m2 and therefore did not require an EPC.
What is the GIA?
The GIA is the area of the internal face of the perimeter walls at each floor level.
What is included in the GIA?
- Areas occupied by internal walls (whether structural or not) and partitions.
- Service accommodation such as WCs, showers, and changing rooms.
- Columns, piers, whether free standing or projecting inwards from an external wall, chimney breasts, lift wells, stairwells, and so on.
- Lift rooms, plant rooms, tank rooms, fuel stores, whether or not above roof level.
- Open-sided covered areas (should be stated separately).
What is excluded by the GIA?
Gross internal area excludes:
- Open balconies.
- Open fire escapes.
- Open-sided covered ways.
- Open vehicle parking areas, terraces and so on.
- Minor canopies.
- Any area with a ceiling height of less than 1.5m (except under stairways).
- Any area under the control of service or other external authorities.
Was this not non-compliant with the Homes (Fit for Human Habitation) Act 2018?
No. The act applied to all tenancies from 20th March 2020 and had not previously applied to this property.
If the tenant had not died, it would have applied.
What are the exceptions under the Homes (Fit for Human Habitation) Act 2018?
- Problems caused by tenant behaviour
- Events completely outwith LL’s control e.g. storms, fire, acts of God
- The landlord will not repair your possessions or furniture belonging to previous tenants
- If the landlord hasn’t been able to get permission from certain other people e.g. owner of the buildings, planning permission.
Where might the Property have fallen foul of the Homes (Fit for Human Habitation) Act 2018?
- excess cold
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What standard would you need to bring the Property to, in order to meet letting legislation?
- EPC: Would need to be brought to an E standard. As per the Minimum Energy Efficiency Standards, as per Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.
- Property would need to be rewired and a EICR produced prior to leasing. As per the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020
Smoke and Carbon Monoxide Alarms Fitted. As per the Smoke and Carbon Monoxide Regulations (England) Regulations 2015.
Private Water Supplies - Compliance. As per the Private Water Supplies Regulations (England) 2016.
Septic Tank that would need to be installed would need to drain into a field drain or a sewage treatment plan would need to be installed. As per the General Binding Rules for Small Sewage Distarge. As per the Environmental Permitting (England and Wales) (Amendment) Regulations 2014
Need to comply with Homes (Fit for Human Habitation Act) 2018.
What is the relevant holiday letting legislation?
Health and Safety - Risk Assessments
Fire Safety - Risk Assessments, fire alarms, upholstered furniture complies with Regulatory Reform (Fire Safety) Order 2005.
Gas Safety - Gas Safety (Installation and Use) Regulations 2018
Smoke and Carbon Monoxide Alarms - Smoke and Carbon Monoxide Regulation (England) 2016.
Furniture - The Furniture and Furnishings (Fire) (Safety) Regulations 1988.
General Safety - General Product Safety Regulations 2005
Electricity - Electrical Equipment (Safety) Regulations 1994
Equality Act 2010 - Accessibility
