Buy To Let Tax Allowances

Buy To Let Landlords may not be aware but a tax allowance can be claimed if making certain improvements to your investment property or properties. Whether you are letting flats or houses you could make certain energy saving improvements and claim tax allowances.

‘The Landlords Energy Saving Allowance’ otherwise known as LESA can help reduce the amount of income tax that the landlord pays. Buy To Let properties (and later commercial properties) benefit from this tax allowance.

Landlords can claim a maximum tax allowance of £1500 per a Buy To Let property or Commercial Property for expenditure on draught proofing, hot water insulation, loft insulation, cavity wall insulation and solid wall insulation. Advice can be sought by calling the Government’s LESA on 0800 512 012.

Landlords have two routes when tenancy deposit protection becomes law

Option 1 – The landlord can retain control of the Tenant’s deposit but must pay a fee for its protection. Dispute Service and Tenancy Deposit Solutions are the two companies that operate this type of protection and fundamentally it is insurance. Not Landlord Insurance but Tenant Insurance.

Option 2 – The landlord places the deposit funds with a custodian. Computershare is an organisation that already operates the scheme in Australia and has been awarded the Custodial Scheme in the UK.

The Buy To Let landlord will need to register the deposit when taking a new deposit relating to a new Assured Shorthold Tenancy Agreement (AST). Please note the word new was used, as our understanding is that the regulations are not retrospective.

Landlord Mortgages offer Buy To Let Mortgages, so whilst we can report news such as the above we cannot be held responsible for any inaccuracies contained herewith.

Energy Tips for your Buy To Let Property

Did you know that the Government has made a commitment to the homeowner? The larger Energy suppliers are obliged to help you improve you property or properties energy efficiency. It does not matter whether the property is a Buy To Let flat or a Buy To Let house, suppliers are there to help. Worthy incentives exist and it does not matter whether the company supplies your energy or not.

Local Authorities are also very helpful and can award grants to residents.

According to research by the Trust 7 out of 10 residents are of the opinion that an energy efficient house or flat is worth paying more money for (44% are willing to pay between £5,000 - £10,000 more for a green home).

Purchasing Buy To Let properties in need of the following could add sizeable value to your property investment:-

A property with inadequate levels of insulation
Single glazed flats and houses
Old boilers that clearly appear to prospective buyers as inefficient


A recent survey explained how old boilers; single glazed windows and insufficient insulation could sway more than two thirds of homebuyers against a purchase. If you then compare this to the one in ten homebuyers who are apparently reluctant to purchase a property with dated or scruffy décor, poorly kept garden, dirty or untidy living space then you have to admit that the landlord maybe missing a trick!

I must admit that with the increased competition between landlords I would certainly focus more on properties that are in need of more sizeable improvements. With so many inexperienced Buy To Let property investors taking out Buy To Let Mortgages on ‘make over’ style flats and houses it would be prudent to look for Buy To Let properties in need of an ‘Energy Makeover’.

Buy To Let Tips in detail

Loft Insulation

We all know that heat rises but all to often we forget about what we don’t see. Increasing the amount of loft insulation could reduce your tenant’s gas bill by a few hundred pound a year. You could proudly boast to prospective tenants that your extra loft insulation reduces their bills!

To maximise the energy saving effect it is recommended that the loft be insulated to a depth of 270mm. Don’t forget to call LESA to find out more about grants.

So in summary this improvement is cheap, clean to handle and quick to install i.e. taking less than 3 hours from start to finish.

Cavity Wall Insulation

Apparently, by installing Cavity Wall Insulation you could reduce heating costs by up-to 33%.

Houses built in the last century are likely to have a cavity but this does not necessarily mean that good insulation exists between the two walls.

By filling the gap between the two walls of the house with a suitable material will create an effective barrier. With installation your tenant will find less condensation and a more even temperature throughout the house.

The Government department quotes ‘Cavity wall insulation is quick, clean and relatively inexpensive to install. It's injected into the cavity from the outside, taking between two and three hours in a three bedroom semi-detached house. It typically costs less than £500, and with the savings you make on your heating bills, it can pay for itself in around three years.’

Boiler

Out of date boilers do put off around a third of property buyers, so after purchasing your Buy To Let property with an old boiler you need act quick and fit a new boiler in order to attract the highest rent for your Buy To Let investment.

Remember ‘High efficiency condensing boilers convert more than 88% of their fuel into heat, compared to 78% for conventional types. A high efficiency condensing boiler works on the principle of recovering as much as possible of the waste heat which is normally rejected to the atmosphere from the flue of a conventional (non-condensing) boiler. This is accomplished by using an extra-large heat exchanger or sometimes two heat exchangers within the boiler which maximises heat transfer from the burner as well as recovering useful heat which would normally be lost with the flue gases. When in condensing mode (for condensing boilers do not condense all the time) the flue gases give up their 'latent heat' which is then recovered by the heat exchanger within the boiler. As a result the temperature of the gases exiting the flue of a condensing boiler is typically 50-60°C compared with 120-180°C in a current non-condensing boiler. At the same time an amount of water or 'condensate' is produced.

A condensing boiler will always have a better operating efficiency than a conventional non-condensing one, due to its larger and more efficient heat exchanger.’

If your proposed Buy To Let purchase contains a boiler that is around 10-15 years old then you are probably onto a winner. Replacing an old boiler with a new high efficiency condensing boiler will not only save you around a third on your heating bills straight away but keep you within the law! A lot of landlords fit a new kitchen or bathroom when renovating buy to let properties. So to minimise cost and disruption the landlord should consider installing a new high efficiency-condensing boiler at the same time.

Also, the right heating controls could save up to 40% on your fuel bill.

Double Glazing

According to a recent survey 20% of buyers were put off a property because of single glazing. By trapping air between two pieces of glass you can add value to your property whilst lowering your fuel bills!

If you're on a budget, fitting secondary glazing could be the answer but is less likely to add significant value to the property.

Property Tips