Good news for UK landlords of residential property. The Treasury have added to the list of energy-saving items in respect of which they may claim deductions. At the moment, such landlords may deduct expenditure incurred on the acquisition and installation of hot water system insulation, drought proofing, and solid wall insulation. With effect from 6 April 2007, they may also deduct expenditure incurred on acquiring and installing floor insulation.
The cap on the deduction is also being increased, with effect from that date. In place of the current restriction of the deduction to £1,500 per building, there is a new restriction of £1,500 per property. So if a landlord owns several flats in a block, he may, from 6 April 2007, claim a deduction of up to £1,500 per flat. Before that date, he would have had to restrict himself to a total deduction of £1,500, irrespective of how many flats he had in the building, and how much expenditure he had incurred on each one.
The Government hopes that these incentives will encourage landlords to consider energy-efficient ways of developing their properties.
Tasty carrots. Infinitely preferable to a big stick.
Reference: Energy-Saving Items Regulations 2007, SI 2007/831 (pdf).