For those of us who rent there are much fewer options open to us when it comes to reducing our CO2 emissions in the home. The no cost and low cost measures are well within our grasp and they can make significant savings, but to make bigger cuts money needs to be invested.
As a renter, there is little incentive to invest in energy efficiency measures as you may only be living there for another year or two, and your landlord may not be interested in improving the energy efficiency of the homes they own because they don’t pay the bills.
To help break this Catch 22, there is a nice little incentive to tempt your landlord into making that investment: the Landlord’s Energy Saving Allowance (LESA).
This is a tax deduction which allows a landlord to reduce their taxable income by the cost of certain energy efficiency measures up to a value of £1,500 per house per year.
The measures covered by the LESA are:
- Cavity wall insulation
- Loft insulation
- Solid wall insulation
- Draught proofing
- Hot water cylinder insulation
- Floor insulation
Other measures such as double glazing and boiler replacement may be entited to other tax deductions.
If your landlord fits loft insulation, floor insulation and draught proofing in your home and it costs, say £1,000 in total, they can deduct £1,000 from their taxable income at the end of the tax year. If they pay tax at 40%, the insulation will end up costing them £600 rather than £400, if they pay tax at 20%, the insulation will end up costing them £800.
The LESA is open to both individual and corporate landlords (although it cannot be claimed if the let is under the Rent A Room Scheme or a holiday let) and will run until 1st April 2015.
As energy prices continue to rise, renters will become increasingly interested in the energy efficiency of prospsective homes. Landlords now have to show an Energy Performance Certificate to potential new renters and by taking steps to fit insulation and other energy efficiency measures, the rating will improve making the home more attractive.
The LESA coupled with the fact that a wide range of energy efficiency and microgeneration measures qualify for a reduced VAT rate of 5%, makes a strong financial incentive for landlords to improve the energy performance of the homes that they own. So get friendly with your landlord and try and persuade them to takes steps to improve your home.
For more information see the DirectGov page.