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OPERATING COSTS

Council Tax Council tax is paid by the occupier. However, if the property is vacant then the owner is responsible and liable to pay council tax. The rate of council tax payable is dependent on the value of the property and the tax rate set by the Local Authority. In some instances reductions may be available.

Factoring Charges If your property is an apartment, or it shares communal facilities with other properties, a factoring charge will be payable. A factoring charge is the same as a service charge in other parts of the UK. The factoring charge is a monthly cost that pays for the upkeep of the building, maintenance of any communal facilities and building insurance. If it is a large apartment block this may include the cost of paying an agent to manage the building.

The details of what can and cannot be charged by the landlord will be specified in the lease. This is a cost that is paid by the owner of the property.

Factoring Charges are known as service charges in England & Wales.

Repairs and Maintenance Repairs and maintenance of a property are the responsibility of the owner. However, tenants may be liable for damage caused during the tenancy period, barring normal wear and tear. Between tenants, the owner will need to ensure that the property is in a good condition for it to be relet, which will include repairs and regular redecoration.

Management Fees These fees are charged by a lettings and management agency for their services, including locating a tenant and contract renewal.

Annual Tax on Enveloped Dwellings As a consequence of owning UK residential property through a company, there may be an obligation to pay the Annual Tax on Enveloped Dwellings (ATED). These charges are expected to be indexed in line with the previous September s Consumer Price Index.

The table below outlines the ATED levy amounts for 2021.

There are a number of reliefs from the ATED available, which can be claimed by completing a UK ATED charge return correctly. You are advised to seek professional UK tax advice when completing any UK tax returns as an incorrect or late filing will incur penalties.

Property Value Annual Levy

For the tax year ended 31st March 2021

Up to £500,000 NIL

£500,001 to £1,000,000 £3,700

£1,000,001 to £2,000,000 £7,500

£2,000,001 to £5,000,000 £25,200

£5,000001 to £10,000,000 £58,850

£10,000,001 to £20,000,000 £118,050

£20,000,001 and over £236,250

OPERATING COSTS