Global Mobility Insights, March 2025 – Part I

This Bill aims to provide tenants with greater protections and is currently in its second reading in the House of Lords. Whilst timescales remain unconfirmed, guidance indicates that we could see changes implemented as early as the Spring. These changes include landlords being forbidden from accepting or offering rents over the advertised price, and the mandatory threshold for eviction increasing from 2 months’ to 3 months’ rent arrears, with the notice period increasing from 2 weeks to 4 weeks. Click here for a full update.

Most people are familiar with Stamp Duty Land Tax (SDLT) forming part of the financial considerations when purchasing property in England and Northern Ireland, as the amount payable is calculated based on a percentage of the purchase price. Currently SDLT is set at 0% up to £250,000 after which tax is payable at 5%, however, as of 1st April 2025, tiered thresholds are lowering, with SDLT becoming applicable at 2% of the purchase price on properties valued at £250,000+, meaning that you are only exempt from paying this tax on properties valued at £125,000 and below.

These changes are also impacting the rental market and Tenants with residential leases. SDLT is currently payable on rental properties once the cumulative rent exceeds £250,000, therefore only really impacting those with large properties often situated in London and the Home Counties. However, aligning with the changes in the sales market, as of 1st April 2025 the threshold on rental properties halves to £125,000. With this impacting new as well as current leases, this change we will see more tenants being liable to pay this tax in order to be tax compliant.

In order to calculate the tax payable, you need to establish the “Net Present Value” of the rent over the term of the lease. The formula for this is quite complicated and whilst the government provide an online calculator at GOV.UK – SDLT Calculator – for tenants to work out their liability, the process can be confusing.

An SDLT return is due to HMRC within 14 days of the start of the lease, or the renewal, depending on the financial trigger, together with payment, which provides a tight timeline, as there are fines for late payment.

One point to note is that if the lease ends prior to SDLT becoming due and a new lease is entered into, by the same parties in the same property, the clock is effectively re-set.

Recent changes in Mexico’s property rental laws, particularly in Mexico City, have introduced the following key regulations:

• Limits on rent increases in Mexico City: Since August 2024, landlords have been prohibited from raising residential property rents above the inflation rate reported by the Bank of Mexico for the preceding year. This reform aims to align rent adjustments with inflation, preventing disproportionate increases – previously, tenants were experiencing hikes of up to 10% of the amount initially agreed.
• Mandatory digital registry for lease agreements: Also since August 2024, landlords have been required to register all residential lease agreements in a digital registry managed by the Mexico City Government. This must be done within 30 days of execution. With this reform, the Government are seeking to formalise and increase transparency within the rental market.
  
• Restrictions on short-term rentals: Since October 2024, property owners have been restricted to renting out their properties for six months per year maximum. This reform aims to counter the gentrification trend and restore the balance between short-term rental platforms (like Airbnb) and traditional hotels.