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Tax incentives needed to help energy efficiency in private renting

The landlords’ trade body says the tax system needs reforming to support energy improvements in the private rental sector.

The intervention by the National Residential Landlords Association comes as Chancellor Rishi Sunak is putting the final touches to next week’s Budget amidst swirling speculation over the government’s flagship Green Homes Grant scheme.

Last week the all-party Environmental Audit Committee of MPs concluded the scheme had been “poor” while the eligibility criteria “prevented many from being able to access vouchers for the measures they required.” Over last weekend The Times suggested the government would shortly scrap the scheme completely.


Given that over 32 per cent of properties in the private rented sector were built before 1919, the private rental world faces a huge challenge in making homes energy efficient when compared with any other housing sector.

The government has committed to upgrade as many private rented sector homes as possible to Energy Performance Certificate Band C or better by 2030. Currently, 62 per cent have an EPC rating of D or lower.

Now the NRLA is calling on the Chancellor to help achieve this by ensuring tax actively supports landlords who want to make energy improvements. 

Ministers have proposed to increase the amount up to which landlords have to pay to make a property more energy efficient from £3,500 to £10,000.  

According to government data, the average gross rental income for landlords is £15,000 per year before tax and other deductions, and the NRLA insists the impact of this change is likely to decimate the income of some landlords. 

The association is proposing that energy efficiency measures carried out by a landlord should be offset against tax at purchase, as repair and maintenance, rather than as an improvement at sale against Capital Gains Tax. 

This would address anomalies – for example, whilst replacing a broken boiler is tax deductible, replacing an energy inefficient model for a more efficient boiler or heating system is not.




Ben Beadle, NRLA chief executive, says: “The rental market stands ready to play its part in securing a green recovery. However, to achieve this we need a tax system that properly supports and encourages the work needed to ensure rented homes as are energy efficient as possible on a long-term basis.

“The Green Homes Grant scheme proves that short term measures do not work. 

“The Chancellor needs to use tax more positively to encourage investment in energy improvements. This would play a crucial role in cutting bills for renters, reducing carbon emissions and improving the nation’s housing stock.”

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    Allow landlords to charge higher rents for more energy efficient properties on the basis that tenants will pay less for energy. That way the landlord and not the tenant gets a return on the investment and can make a business decision based on economics and market forces.

    So far I have never ever been asked about EPC rating or energy bills by any tenants.

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    You can already set 'Green Improvements' again your income on your Tax Return, so I think the NRLA are wrong about LLs needing to wait until they sell to get the credit.


    That still means the landlord is down at least 55% of the cost, with the tenant reaping the benefit of lower fuel bills unless the rent is increased to reflect these lower fuel bills.

    I've still got a load of old light bulbs which I've replaced with LED lights in my own homes, where I pay the energy bills. I put these in rental properties to replace blown bulbs not replaced by tenants - up to them to pay for their own energy savings if they want to!

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    Maybe if Council stopped continuously raiding the LL's Finances and interfering between Tenant and Landlord trying to put them at one another's throats, now actively encouraging Tenants to Claw back the Rent, this will happen after they have moved out, its an initiative by Council, we'll called it Free Renting from Private Landlords. They expect LL to do all the up grading while they raid the piggy Bank, introduce Licensing Schemes and now encourage Tenants to look for their money back after they had the benefit of all the LL facilities. Disgraceful behavior by Council Leaders misuse of office and should resign not fit to govern. They are supposed to be our employees and are there as the Servants of all the people not favoring one section of the Community over another.


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