NOW IS A GOOD TIME TO ACT !! There are some really good incentives for Landlords to insulate and make energy efficient improvements to their rented properties . Apart from the obvious of reducing carbon emissions, Tenants being a lot more comfortable, happy and having lower fuel bills , for Landlords there is also the attraction of getting their money back 'in kind' with a reduction in their  income tax bill. 

EXAMPLE :- If a landlord spends £1200 in hard cash having loft insulation installed he can have this amount knocked off his tax bill. Indeed there is an annual limit that can be reclaimed of up to £1500 for each and every property that improvements have been made on. So if, since 2004  you have insulated lofts, injected cavity walls, done draft proofing, or other thermal performance improvements  you should be thinking of claiming this allowance ! 

The Landlord's Energy Saving Allowance ( LESA) was introduced by Her Majesty's Revenue  and Customs  as a tax allowance for  Landlord's who have upgraded their rental property. Everybody wins. If you pay tax on the profit that you make  on rentals then you can apply for this LESA allowance when you fill in your tax return form. Its worth  £1,500 in tax savings each year for every property that you upgrade i.e. if for example you spend £1,500 each on three properties in one year then you can potentially take full advantage of your LESA tax allowance 3 x £1,500 i.e. reducing your tax bill by £4,500 . You can't claim however if you just rent a room out or if you let your property as a Holiday Let. NB the LESA is not a cash payment back to you  - it is a Tax allowance and you can only claim for what you have actually spent.


So, why not enhance your property instead of paying the equivalent amount in TAX !

Since 2004 the Government has been a new type of improvement that has qualified and you will need to check when you did the work that you are claiming to make sure it qualifies:
  • From April 2004 onwards loft and cavity insulation was included
  • From April 2005 the allowance extended to solid wall insulation.
  • From April 2006 insulating hot water tanks and draft proofing became included 
  • From April 2007 underfloor insulation got added to the allowance   

LESA cannot be claimed for any other energy efficiency measures other than those listed above unless they fall under the category of repairs - works such as installing double glazing or secondary glazing and fitting an up to date boiler  might constitute LESA repair works and you should contact your local tax office to get clarification  on such matters. 

The scheme has been running since April 2004 and there are only 3 more years left to run to claim LESA which comes to an end on the 1st of April 2015. In addition to the LESA you could also be eligible for a grant - many Council's and energy providers operate  schemes to improve the quality of housing and energy efficiency .  
There is a list of current grants available at the Energy Saving Trust  and if you need any technical information about insulation and making improvements there is an excellent source of downloadable information at the Centre for Sustainable Energy .....there has never been a better time to get the improvements done!  Ask your accountant or Local Tax office for more detailed advice and information.