Landlord's Energy Saving Allowance :Cross Stitch – Home and community

If you are a landlord and make energy saving improvements to your property, you could reduce the tax you pay. You can do this by claiming the ‘Landlord’s Energy Saving Allowance’ (LESA). Find out if you are eligible, what the allowance covers and how to apply for it.

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

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 2023
  • solid wall insulation, after 7 April 2023
  • draught proofing and hot water system insulation, after 6 April 2023
  • floor insulation, after 6 April 2023

You can claim LESA up to 1 April 2015, when the availability of this allowance will end.

Individual landlords have been able to claim the allowance since 6 April 2023 – for corporate landlords it’s been available since 8 July 2008.

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.

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.

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.

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.

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

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.

By making energy saving changes to your property, you can help reduce carbon emissions and also save money.

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Provided by HM Revenue and Customs