In a bid to incentivize landlords to enhance the energy efficiency of their rental properties, tax accountants Blick Rothenberg are urging the government to introduce tax relief measures. The firm suggests that landlords should be eligible for income tax or corporate tax relief if they make improvements that boost the Energy Performance Certificate (EPC) ratings of their properties.
Heather Powell, Partner and Head of Property and Construction at Blick Rothenberg, emphasized the need for the government to support landlords in meeting higher energy efficiency standards set to take effect from April 2025. Powell urged Chancellor Jeremy Hunt to consider implementing this measure in the upcoming budget to promote a more sustainable housing sector.
“While the government has been advocating for improvements in the energy efficiency of rental properties, it is imposing stricter standards from April 2025. However, it has simultaneously halted requirements for landlords to undertake these essential works,” Powell stated.
To address this issue and encourage landlords to invest in energy-efficient upgrades, Powell proposed allowing buy-to-let landlords to claim income tax relief during their annual tax return declarations. Corporate tax relief could also be applicable if the properties are owned through a limited company.
Powell emphasized that this step would not only ensure timely tax relief for landlords but also contribute to funding the necessary investments in improving the overall quality of rented accommodation in the UK.
Blick Rothenberg highlighted the importance of financial incentives, stating that without such support, landlords might lack the motivation to enhance a property’s EPC rating. To ensure the effectiveness and value for money of any proposed tax relief, the firm recommended a robust system with specific requirements for landlords:
- Obtain an initial EPC rating, indicating the property’s current energy efficiency status along with a list of recommended improvements.
- Undertake the necessary work, maintaining records such as receipts.
- Obtain an updated EPC rating, showcasing the impact of the implemented improvements.
Blick Rothenberg’s proposal aims to strike a balance between promoting environmental sustainability and providing practical support to landlords in navigating the upcoming changes in energy efficiency standards.