New changes to the so-called “Green Tax” legislation is predicted to affect as many as 300,000 buy-to-let landlords, who will be forced to pay out up £5,000 in home improvement costs.
What Is Green Tax?
The green tax, or green levy, is a new government initiative to force landlords to improve the energy efficiency of their properties, with the aim of reducing heating costs and cutting carbon emissions. The government hopes that these initiatives will reduce fuel costs of the average household by 11% by 2020.
The latest changes require landlords to pay in advance to carry out works in the home to improve energy performance. Typically this involves cavity wall insulation, loft insulation, and installing more efficient boilers. Previously, landlords we able to apply for a Green Deal loan to cover the cost of the works – tenants would then repay the loan as a part of their tenancy agreement.
All Properties Must Be Band E Energy Efficient by 2018
The government has stipulated that all properties need to be Band E Energy Efficient by 2018. There are around 300,000 rented properties that do not currently meet this criteria, and it will cost landlords around £5000 to carry out the required improvements. Band E is currently the national average.
The Solution For Buy-To-Let Investors
A simple solution is for new B2L investors to only invest in new properties that already meet, and exceed, Band E rating.
For more information call Surrenden today on 0203 3726 499.