Up to 330,000 buy-to-let landlords will be required to pay a “green tax” of up to £5,000 to make their properties more energy efficient, according to a report in the Telegraph.
The newspaper has learnt that many landlords will have to pay upfront for measures such as insulation, cavity wall filling and new boilers from 2018.
It had previously been suggested that landlords would be able to apply for loans from the Green Deal scheme to make the necessary improvements, which would then be repaid by tenants who benefit from lower bills. However, the new Department for Business, Energy and Industrial Strategy is now proposing that homeowners provide the money.
Landlords who let out homes from the Victorian and Edwardian eras are likely to be most affected by the green tax as these types of properties are typically less energy efficient compared to homes built over the past decade or so.
"Unless they make funding available, landlords will be forced to pass these costs on to tenants in the form of higher rents. It could also make being a buy-to-let landlord prohibitive. They could struggle to find such a large amount of money upfront," said Richard Jones, policy adviser at the Residential Landlords Association.
"Landlords have been harshly treated. This is an extra stealth tax on top of all the other measures that threaten the finances of the sector," he added.
From April 2018, buy-to-let landlords must raise the energy efficiency of their rental homes to at least Band E. That means that around 330,000 residential properties currently in bands F and G will require major works.