Landlords will pass ‘green tax’ onto tenants

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Hundreds of thousands of buy-to-let landlords will be required to pay a ‘green tax’ of up to £2,500 per property upfront to meet new energy efficiency standards next year, rather than £5,000, under new government proposals.

However, tenants will be the real beneficiaries of the cut, as it means that landlords will simply pass lower costs on to them in the form of a less-than-expected hike in rents, according to the Residential Landlords Association (RLA).

Many landlords have welcomed the government’s decision to slash the amount it expects landlords to pay for energy efficiency improvements where homes have to be brought up to a minimum Energy Performance Certificate rating of E.

This requirement comes into force for new lets and tenancy renewals from April 2018 and for all residential lets from April 2020.

Initial government proposals were that landlords would be required to pay up to £5,000 per property upfront to meet new energy efficiency standards, but the limit has now been cut to £2,500.

However, rather than save landlords money, the RLA argues that this could help avert a new ‘green tax’ on tenants as costs get passed on to them in higher rents.

RLA policy consultant, Richard Jones, said: “The government has clearly listened to the RLA and cut in half the original cap on how much landlords would be expected to pay for energy efficiency improvements. This is welcome news for tenants as it will mean costs being kept down.”

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Written by: Houseladder