Thousands of buy-to-let home owners will have to pay a "green tax" of up to £5,000 to make their properties more energy efficient. Landlords could apply for loans from the Green Deal scheme for improvements, until recently, which were then repaid by tenants who benefit from lower bills. However, the new Department for Business, Energy and Industrial Strategy is now proposing that the owners provide the money.
Richard Jones, policy adviser at the Residential Landlords Association said, "Unless they make funding available, landlords will be forced to pass these costs on to tenants in the form 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. 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."
Owners must raise the energy efficiency of homes to at least Band E, from April 2018. In a briefing, the government proposed a "hypothetical £5,000 spending cap” and insisted most landlords will have to pay no more than £1,800 to meet the standards. However, Gas central heating can cost £3,900, cavity wall insulation £500 and loft insulation £300. The Department suggested landlords can borrow more. In its presentation, it said, "Data suggests around 60 per cent of privately rented properties are currently owned outright. So we assume that these landlords will have a significant amount of equity against which they might borrow."
Philip Hammond, the new Chancellor, said he will not change the approach despite the concerns of Tory MPs. He said taxation "is there for a simple purpose: to raise revenue. I expect the taxes we put in place to achieve that."
