The British Property Federation is telling the government to consider introducing zero VAT for landlords on energy efficiency work carried out in homes.

The federation says the government must take the leading role to ensure it is fully supporting property owners, and should try and take pressure off landlords and homeowners so the UK can reach the ‘fabled’ net zero carbon target.

The BPF calls for zero VAT for landlords on all residential building repair and maintence work for energy efficiency upgrades to ‘encourage’ the uptake in the residential sector. It slams the government’s current approach of VAT relief on installing energy savings materials as not being fit for purpose, as it fails to realise energy efficiency improvements are hardly ever carried out in isolation.

The federation highlights real concerns over the UKs housing stock retro fitting as around 58 per cent have an EPC of D or lower whilst 20 per cent of the owners are not planning to upgrade their property’s energy efficiency.

To help higher investment in large scale commercial investment into retrofit projects the BPF calls for a reform of the capital allowance system to encourage and support long term investment into energy efficiency and carbon reduction measures. The federation wants another form of relief for capital expenditure that could provide full tax relief in one year as well as a repayable tax credit system.

It warns the government not to make business rates a barrier to undertaking energy upgrades and to introduce a new improvement relief.

BPF chief executive Melanie Leech says: “Some 80 per cent of commercial and residential buildings that will exist in 2050, the deadline for reaching net zero, have already been built.

“The country’s homeowners and commercial property owners face a real challenge in reaching net zero targets and complying with incoming legislative changes. Failure to remove financial barriers to energy efficiency upgrades, is a failure to recognise the huge task the country faces in reaching net zero.

“The government needs to recognise the importance of incentivising energy upgrades across both the commercial and residential property sectors in next week’s Budget. The Chancellor has a clear opportunity to alleviate costs for households and encourage investment in measures that improve a property’s energy efficiency.”

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