Fact sheet: 'Replacement of Domestic Items’ relief for landlords

Plans are afoot to strengthen HMRC (HM Revenue and Customs) to act quickly and robustly against professional tax advisers who help clients avoid paying the correct tax. Propertymark welcomes this because it aligns with our calls to the Treasury, and we support HMRC’s ambition to ensure the financial sector upholds the highest standards and integrity of the tax system.

The UK Government’s Making Tax Digital (MTD) initiative is transforming how taxes are reported and managed, with significant implications for property agents. Self-employed individuals and landlords earning over £50,000 per year must comply with MTD for Income Tax Self-Assessment (ITSA) from 2026, and those earning over £30,000 from April 2027. In her Spring Statement on 26 March 2025, Chancellor Rachel Reeves, MP, announced that the threshold will decrease to £20,000 in 2028.

Cyngor Gwynedd (Gwynedd Council) was quick to use new tax powers to raise the premium rate for second homes and short-term lets (STLs) to a rate of 150% from April 2023 and went on to be the first council to use an Article 4 direction, removing permitted development rights to change a main home into a second home or short-term holiday accommodation, in September 2024. The outcomes of implementing these new measures are being carefully watched by the housing sector.

HM Revenue and Customs (HMRC) has seen a spike in Stamp Duty Land Tax (SDLT) repayment requests where it’s claimed a property is not suitable for use (NSFU) as a dwelling so the lower, non-residential rates of SDLT apply. However, over 95% of NSFU claims are found to fall well below the required threshold, leaving property owners at risk of penalties.