news | 3 months ago | Jodie Bradley

If the government wants landlords to improve energy efficiency ‘it should allow [them] to receive tax relief’

Heather Powell, partner and head of property and construction at Blick Rothenberg, said that if the government wants BTL landlords to improve energy efficiency of its rental stock, it should provide them with a financial incentive in the form of tax relief.


Heather said: “While the government has been encouraging BTL landlords to improve the energy efficiency of their properties, it’s about turn on the imposition of higher standards from April 2025 and has stopped all requirements for landlords to undertake these works.

“If the government is serious about improving the efficiency of rental homes, it should allow landlords to get income tax relief when making their annual tax return declarations (or corporate tax relief, if the properties are owned through a limited company).

“This step would ensure that the landlords get tax relief on a timely basis and would help landlords fund the investment in improving Britain’s stock of rented accommodation.”

Blick Rothenberg believes that if the government doesn’t take this step, the reality is that landlords will not look at improving the EPC ratings of their rental stock, as there is no legal requirement and no financial incentive.

This is because as they won’t get relief for these capital improvements unless and until they eventually sell the properties concerned, at which stage they can offset the capital improvements against the capital gain.

However, if they aren’t planning to sell a property, this is clearly a ‘null relief’.

Blick Rothenberg suggested that the government could ensure that landlords have to meet all the following requirements:

  • obtain an initial EPC rating showing the energy efficiency status of the property ‘today’ with a list of recommended improvements
  • undertake the work required (and have receipts etc. in this regard) 
  • get an updated EPC rating showing the impact of the relevant improvements

 

Relief should only be provided once all the above steps have been satisfied.

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