Buy-to-let landlords to be hit with ‘green tax’

A new report from the Telegraph has suggested that around 330,000 buy-to-let landlords could be hit with a ‘green tax’ of up to £5,000.

The tax will be designed for landlords to make their property more energy efficient. The Telegraph states that many landlord will face upfront costs for features such as cavity wall insulation and new boilers from 2018.

Green Deal

Previously, it was suggested that landlords would be able to apply for loans from the Green Deal scheme, in order to make required improvements. These bills would then by repaid by tenants, who would benefit from lower costs.

However, the new Department for Business, Energy and Industrial Strategy is now suggesting that homeowners provide this money.

Buy-to-let landlords who own property from the Victorian and Edwardian eras are set to be most affected by the tax. Typically, these properties are less energy efficient, in comparison to newer homes.

Buy-to-let landlords to be hit with ‘green tax’

Harsh

Richard Jones, policy advisor at the Residential Landlords Association, noted, ‘unless they make funding available, landlords will be forced to pass these costs on to tenants in the form of higher rents. It could also make being a buy-to-let landlord prohibitive. They could struggle to find such a large amount of money upfront.’[1]

‘Landlords have been harshly treated. This is an extra stealth tax on top of all the other measures that threaten the finances of the sector,’ he added.[1]

From April 2018, buy-to-let investors are legally permitted to raise the energy efficiency rating of their rental properties to at least a Band E. This means that there are presently around 330,000 residential properties with band F and G property that require work to be done.

[1] https://www.landlordtoday.co.uk/breaking-news/2016/7/landlords-set-to-be-hit-with-a-hefty-green-tax