Make Energy Improvements Tax Deductible Say Landlords

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MEES:

Energy efficiency improvements undertaken by landlords and recommended on Energy Performance Certificates should be tax deductible the country’s leading landlord organisation argues.

From 1st April, all new tenancies and those being renewed will require properties to have an Energy Performance rating of E or better. From April 2020 the rules will apply to all rental properties.

Whilst the Government has said that landlords unable to access funding to make such improvements can register that their property is unable to meet the new standards, it is proposing that in due course a new £2,500 cap be introduced on the amount a landlord should be expected to pay to make the necessary improvements to their properties.

The Residential Landlords Association is arguing that all improvements a landlord carries out that are recommended on an Energy Performance Certificate should be tax deductible. Currently landlords may make such a deduction for ‘repairs’ but not for ‘improvements’. Such a policy would support landlords in all property types to make ambitious energy efficiency improvements, beyond just those who are required to bring their properties up to the Government’s target.

Linking tax relief to what is recommended on a Certificate would help to prevent abuses.

Recent research by RLA PEARL has found that 61 per cent of landlords would be encouraged to improve the energy efficiency of their properties if there was tax relief to do so.

According to official data, 6.6 per cent of private rented homes in England are rated either F or G for energy efficiency improvements.  This is down from 25.3 per cent a decade earlier.

David Smith, Policy Director for the RLA, said:

“Whilst considerable improvements have been made over the last decade, private rented homes currently falling below the new energy standards are some of the hardest to treat properties of the country’s entire housing stock.

“Given the importance the Government attaches to improving the energy efficiency of rented homes there is a strong case for giving work to upgrade this the same tax treatment as for repairs.”

The Residential Landlords Association: The home for landlords

• The RLA represents the interests of landlords in the private rented sector across England and Wales. We’re home to over 50,000 landlords nationwide, with a combined portfolio of over a quarter of a million properties. A growing community of landlords who trust and rely on us to deliver day-to-day support, expert advice, government campaigning, plus a range of high-quality services relevant to their needs.
• At the RLA, we understand the challenges faced by a landlord – after all, we’ve been fighting their corner for over 20 years.
• We campaign to improve the private rented sector for both landlords and tenants, engaging with policymakers at all levels of Government. Our vision is to make renting better for everyone involved in the private rented sector.
• RLA PEARL’s recent research on taxation of the private rented sector can be accessed here
• The latest English Housing Survey for 2016/17 can be accessed here It finds that across England. 1.8% of private rented properties have an energy rating of G and 4.8% are rated F.  In 2006 the figures were 6.9% and 18.4% respectively.
• The English Housing Survey finds also that 35% of private rented homes were developed before 1919 compared to 20.6% of owner occupied properties and 6.6% of social rented housing.

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