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Landlord's Energy Saving Allowance

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					Landlord’s Energy Saving Allowance




A landlord who makes energy saving improvements to their property can reduce
the tax they pay. This is done by claiming the ‘Landlord’s Energy Saving
Allowance’ (LESA). It’s important to find out if they are eligible, what the
allowance covers, and how to apply for it. Here is the advice from HMRC.
Please note there should be similar arrangements for the related Water saving
allowance.

Who can claim LESA?
You can claim LESA if you are a landlord renting out residential property and are either:
                                     an individual landlord – someone who pays income tax on
                                        profits from letting

                                     a corporate landlord – someone whose rental business is
                                        registered as a company and you pay corporation tax on
                                        profits from letting
However, you can’t claim if you are a landlord:
                                     claiming an allowance under the ‘Rent a Room’ scheme

                                     of a property rented out as furnished holiday accommodation
                                The Rent a Room scheme (money, tax and benefits section)

LESA - how much is it and what does it cover?
LESA is a tax allowance (not a cash payment) that allows you to claim up to £1,500 against tax
every year. This allowance can be claimed for properties you rent out in the UK and abroad. You
can claim LESA for the costs of buying and installing certain energy saving products for properties
you rent out, but only for what you actually spend.
You can claim LESA for what you have spent on:
                                     cavity wall and loft insulation, after 6 April 2004

                                     solid wall insulation, after 7 April 2005

                                     draught proofing and hot water system insulation, after 6
                                        April 2006

                                     floor insulation, after 6 April 2007
You can claim LESA up to 1 April 2015, when the availability of this allowance will end.

When was the allowance available from?
Individual landlords have been able to claim the allowance since 6 April 2004 - for corporate
landlords it’s been available since 8 July 2008.
How to apply for LESA
You claim the allowance when filling in your tax return.

Individual landlord
If you are an individual landlord, you claim the allowance when you fill in your self assessment tax
return. You’ll need to fill in the costs of buying and installing the energy saving products in the
‘Landlord’s Energy Savings Allowance’ box on:
                                     the UK property pages - if your property is in the UK

                                     the foreign pages under the section ‘Income from land and
                                        property abroad’ - if your property is outside the UK
The amount you enter on the form is claimed against your taxable profits from renting out your
property. This means when you fill in your tax return you deduct the amount you are claiming for
this allowance from your income. This reduces the amount of tax you pay for the year.

Fill in your self assessment form online
You can fill in your self assessment form online - find out about the advantages of doing this and
how to complete a form by following the link below.
                                Understanding and using Self Assessment Online (money, tax and
                                  benefits section)
Or you can go straight to the form and fill it in on the HM Revenue and Customs (HMRC) website.
                                Welcome to online services - self assessment login page Opens
                                  new window
Corporate landlord
If you are a corporate landlord, you can claim LESA under ‘allowable business expenses’ on your
corporation tax return form. You should go to business.link.gov.uk, a website providing advice for
businesses, if you want detailed advice on how to fill in your corporation tax return.
                                Corporation tax - how to fill in your tax return Opens new window

Claiming LESA on other energy saving products
LESA can't be claimed on any energy saving products other than those listed in the section above:
‘LESA – how much is it and what does it cover?’ However, you could be entitled to other tax
deductions if you are improving the energy efficiency of your property. This could apply to installing
double glazing or more efficient hot water boilers that may fall under the category of repairs.
                               Deductions, general matters, repairs - other energy saving
                                 products (HMRC) Opens new window

Can you claim LESA for more than one property?
Since 6 April 2007, it’s been possible to claim a maximum allowance of £1,500 for each house,
flat or bed-sit you rent out. For example, if you rent out a building that contains four flats, you
can claim up to £1,500 for each flat. Previously, the maximum allowance was £1,500 for the whole
building.

Can more than one landlord claim LESA for the same property?
If a house, flat or bed-sit is owned by more than one landlord, they can claim a share of the
allowance either in proportion to:
                                     their ownership of the property

                                     the money they have spent on buying and installing the
                                        energy saving products


Claiming LESA for installing energy saving products yourself
If you install the energy saving products yourself, you can claim LESA for the costs of buying the
products. However, you can’t claim LESA for your own labour and time for putting them in.
Contact your local tax office about LESA
If you have further questions about LESA, contact your local HMRC tax office.
                              Tax offices for individual tax - find your local office (HMRC) Opens
                                 new window

Saving energy and money in your property
By making energy saving changes to your property, you can help reduce carbon emissions and also
save money.
                               Saving energy in your home (environment and greener living
                                 section)
If you want to make other energy saving improvements to your property, you may also be eligible
for grants from public funds, your local council or energy supply company.
                               Search for grants and offers - Energy Savings Trust Opens new
                                 window

More useful links
                             
                             Self Assessment - your tax return
                             
                             Energy Performance Certificates
                             
                             Energy saving video guides - Energy Savings Trust Opens new
                             window
Provided by HM Revenue and Customs
In this section...
                                Letting your home
                                Health and safety in rented accommodation
                                Letting rooms in your home
                                Landlord and tenant obligations
                                Landlord accreditation
                                Landlords and letting agents (tenancy deposit scheme section)

				
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