Property Improvements for Energy Standards should be Tax Deductible

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The Residential Landlords Association (RLA) has argued that property improvements to meet new energy improvement standards should be tax deductible.

The RLA has spoken out about the financial effect new energy improvement rules are having on landlords. From 1 April all new and renewed tenancies will require that homes have an energy performance rating of E or higher. This will be applicable to all rental properties from April 2020.

The government has said landlords who cannot afford to improve their homes to meet the new rules can register this. It also proposes that a £2,500 cap should be put on the amount landlords should have to pay to increase a property’s energy efficiency.

The RLA has argued that such building work should be tax deductible. Currently, money spent on making repairs to rental properties is tax deductible in this way. However, improvements to rented homes are not. The landlord association has suggested that the Government should reflect the importance they place on energy efficiency in the financial support they offer to landlords to make their properties compliant.

The RLA has suggested that this policy change would help ‘ambitious’ energy efficiency improvements. They argue that 61 per cent of landlords would be encouraged to improve the energy efficiency of their properties if there was tax relief available to do so. The change would be especially useful to landlords who operate challenging historic properties.

RLA policy director David Smith explained: ‘Whilst considerable improvements have been made over the last decade, private rented homes currently falling below the new energy standards are some of the hardest to treat properties of the country’s entire housing stock. Given the importance the Government attaches to improving the energy efficiency of rented homes there is a strong case for giving work to upgrade this the same tax treatment as for repairs.’

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