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Euro rule tax blow to landlords

The Residential Landlords Association (RLA) is calling for urgent discussions with ministers following a ruling by the European Court of Justice that will make it more expensive to insulate private rented housing.

On Thursday the court ruled that the lower 5% rate of VAT charged on energy efficiency products breached EU law and could only be applied where such products are used for social housing. All other housing tenures, including private rented housing, will be required to pay the upper 20% VAT rate.

The announcement comes just months after the Government scrapped the Landlord Energy Savings Allowance, which provided vital support to improving the energy efficiency of private rented housing. This was in the face of opposition from 20 groups representing landlords, tenants and energy efficiency organisations.


Government statistics show that 32% of all private rented housing stock was built before 1919, making it some of the hardest to insulate of all housing. Just 24% of homes in the sector have cavity wall insulation and only 25% have 200mm or more of loft insulation.

The RLA has written to the minister responsible for energy efficiency, Lord Bourne, seeking an urgent meeting to establish how best the sector can be supported to meet the unique energy efficiency challenges it faces. 

RLA chairman Alan Ward, said: “The RLA fully supports efforts to improve the energy efficiency of the country’s housing stock. The judgement of the European Court of Justice however jeopardises efforts to do so.

“Private rented housing faces some of the most difficult challenges in improving its energy efficiency given the age of the stock and needs greater not less support to meet the Government’s ambitions on home insulation.

“We are calling on ministers to give serious consideration about a way forward that supports landlords and tenants alike.”

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  • Kenny Sahota

    Simply ridiculous. There should be measures in place to ensure that energy efficiency is encouraged within the private rented sector, not discouraged! Let's hope that something is changed, fast!


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