Tax green light for energy efficient landlords

Tax green light for energy efficient landlords

9:08 AM, 9th February 2011, About 14 years ago

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Buy to let landlords who want to demonstrate their green credentials can save tax and keep their tenants happy while upgrading energy efficiency.

As the Green Deal legislation moves through Parliament, landlords can still gain from taking measures to improve their properties.

The government wants to improve all properties with an Energy Performance Certificate (EPC) rating of F or G to a higher grading – and that might take some hard work for some older properties, which may be a significant challenge for older properties. 

Some simple tips to make rental properties more energy efficient that save tax at the same time are:

  • Cavity wall and floor insulation: Cavity insulation is a job that takes less than a day and barely disrupts the home as most of the work is from the outside. Floor insulation is more disruptive but useful for keeping noise and heat in – especially in a house of multiple occupation (HMO).
  • Loft insulation: Even if a home has loft insulation already,  check that the depth meets the recommended thickness of 250-300 mm don’t forget to insulate the hatch as well.
  • Lag pipes and tanks: Any pipes and tanks in the roof space need lagging to protect from freezing and bursting in the cold. Don’t lay loft insulation under pipes or tanks as rising heat helps stop them freezing and don’t forget pipes in outhouses or to garden taps.
  • Keep draughts out: Block gaps around doors and windows. Fill in any holes inside and out where draughts are blowing through.
  • Install a heating thermostat: Thermostats ensure  a comfortable temperature by switching on and off at set levels and times.
  • Upgrade boilers: Modern boilers generate less carbon dioxide and run more efficiently than models that are more than seven years or so old.

All these costs can be reclaimed as property business expenses – repairs and replacements can be deducted against rents while new installations are capital expenses that can reduce capital gains tax when a property is sold.

Some attract special landlord tax treatment – like the Landlord’s Energy Saving Allowance for replacing boilers.

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