What is the York Landlord’s Energy Saving Allowance?
The Landlord’s Energy Saving Allowance is an effective way for those with rental properties in York and elsewhere to reduce their tax bill.
Landlords can do this when they need to pay for installing any energy saving improvements to their property or properties and claim the Landlord’s Energy Saving Allowance – or LESA, as many may know it.
However, landlords need to be aware that time is running out to claim their LESA allowance since it will come to an end from 5 April 2015.
Landlord’s Energy Saving Allowance – claim it or lose it
There are some strict conditions for those who can claim the allowance – it’s not a cash payment – and it must be done by a landlord who pays income tax on the profits they make from letting.
Or it can be claimed by a landlord with a rental business that is registered as a company and they pay corporation tax on the profits generated from renting.
It’s also important to understand that anyone who is renting out a property as holiday accommodation is not entitled to claim the allowance.
Nor is anyone who is claiming a Rent-a-Room scheme allowance.
The Landlord’s Energy Saving Allowance is essentially a generous tax break which can save landlords a small fortune but many have overlooked it as a way of cutting their tax bill.
It was originally introduced as a way to encourage landlords to improve the energy efficiency of their rental properties which are generally less efficient than other properties.
Landlord’s Energy Saving Allowance – what’s it worth?
The Landlord’s Energy Saving Allowance is a tax allowance worth up to £1,500 in every financial year to help offset the costs of installing and buying energy-saving products for a property.
Again, there are some criteria around what landlords can claim for under LESA and this includes installing solid wall insulation after 7 April 2005 and loft and cavity wall insulation after 6 April 2004.
Landlords can also claim for floor insulation that has been installed after 6 April 2007 and for a hot water system and draft proofing installed after 6 April 2006.
Landlords with private rental properties have had since April 2004 to make a claim while corporate landlords have had the opportunity since July 2008 to claim for the allowance.
How to claim the Landlord’s Energy Saving Allowance
The process for making a claim is actually straightforward and landlords can claim the allowance when filling in their tax return.
It should be noted too that the Landlord’s Energy Saving Allowance is not just for UK properties but for landlords who may have rental properties abroad but pay income tax on their profits in the UK.
Remember, the allowance is applicable to a property that a landlord owns so, for example, if they own four flats in one building then they can claim four times £1,500.
Landlords who co-own a rental property will be entitled to claim a proportion of the Landlord’s Energy Saving Allowance.
Claim for the costs but not installation
Another important point for landlords to remember is that they can claim for any energy saving items but not for the cost of installing them if they carried out the installation themselves.
It should also be noted too that some landlords will also be eligible for cash grants under the government’s Green Deal initiative to help install energy saving improvements to help them comply with the rule changes that are coming in from 2018 which means that all rental properties in the UK will need to have an energy performance certificate (EPC) with a rating of ‘E’ or above.
Any landlords renting out properties with an EPC of F or G from 2018 will be breaking the law.
The other big attraction for carrying out energy efficiencies in a rental property is that it will lead to lower fuel bills for the tenant and help make the tenant happier.
Landlords should also remember that with energy improvements come lower maintenance costs since the properties are less likely to have damp and mould problems.
Here at Redmove we pride ourselves on being York’s leading letting agent and if any property owner in the city, or surrounding area, would like more help or advice about the issues around Landlord’s Energy Saving Allowance we will be pleased to help.
York’s leading letting agent Redmove can help with LESA
Contact our helpful team now on (01904) 488444 and find out why we believe that our premium service comes as standard for landlords in York when they use us for managing their property.
Indeed, many landlords who sign up with us do so because we offer a more cost-effective service than many other letting agents in York and we don’t charge extras like many of our competitors do.
Alternatively, you can find out more about our premium letting service in York by using our booking a rental valuation online form.
For more information about LESA, visit the Government’s website with detailed information about the Landlord’s Energy Saving Allowance or, alternatively, landlords can also contact their local HMRC office for more details on LESA.
We have found that the Energy Saving Trust also has some very useful information on LESA on its website.
Remember – time is running out for using your Landlord’s Energy Saving Allowance with the deadline of 5 April 2015 fast approaching!