ENERGY PERFORMANCE CERTIFICATES FOR RENTED PROPERTY

From 1st October 2008, Landlords in England and Wales will be required to give their prospective tenants an Energy Performance Certificate (EPC) before they let their property.

The EPC enables prospective tenants to compare buildings. The Certificate will show an energy efficiency rating and will give an estimation of the running costs and carbon emissions. It will also recommend measures to improve the property and give advice on energy efficient behavior. Landlords will be responsible for commissioning and paying for the EPC's and providing a valid certificate for tenants.

The significance for Landlords is that, for the first time, prospective tenants will be given an estimate of how much it costs to provide heating, lighting and hot water before they rent a property. The certificate will also show savings that could be made if the energy efficiency of the property was improved. This will give prospective tenants the opportunity to compare running costs as well as rents. With rising fuel prices and tenants becoming increasingly savvy, Government hopes it can harness market forces to raise standards.
While Landlords will not be obliged to carry out the measures, the EPC must be made available to prospective tenants before the property is let. A copy must also be given to the selected tenant before the Tenancy Agreement is signed (except when an existing tenancy is renewed).

The Certificate can only be produced by an accredited assessor. Assessors may be employed by Letting Agents and other organisations, or individual providers. Each certificate will be valid for 10 years and may cost between £75 and £100.

Landlords are advised to improve their properties prior to the EPC's being introduced. Taking advantage of the tax incentives, grants and discounted products.

There are many low cost measures that can be carried out to improve your property, including lagging pipes, increasing the thickness of loft insulation and draft proofing.

The Landlords Energy Saving Allowance (LESA) is available to all Landlords who let residential property and pay income tax. LESA enables Landlords to offset the cost of purchasing and installing various energy saving measures against tax. This includes loft insulation, cavity wall insulation, sold wall insulation, hot water system insulation, floor insulation and draft proofing. Since 6th April 2007 Landlords are entitled to a maximum deduction of £1500.00 per property.

For further information contact the HMRC Self Assessment Helpline on 0845 900 0444 or contact your local Tax Office.