Whether or not you already own a holiday let, you’ll be familiar with Energy Performance Certificates (EPCs); a multi-coloured chart rating from A to G which provides a rating of how energy efficient a building is.
As a property owner, when you rent the property to the public, regardless of whether it is for residential or commercial purposes, an EPC should be provided by you. So, it might come as a surprise to learn that holiday lets might not need one! Read on to find out why…
According to HMRC, there are certain properties which do not require an EPC. This includes places of worship, listed buildings and industrial sites. Significantly, the list also includes, “holiday accommodation that’s rented out for less than 4 months a year or is let under a licence to occupy.” For more information, click here.
What does “licence to occupy” mean?
Holiday let properties are rented under a ‘licence to occupy’. This means that the property’s landlord is normally responsible for the energy bills, and not the guest who is renting it. For this reason, holiday lets may be exempt from the general EPC requirements.
What are the rules?
Your holiday let property will not require an EPC if it meets two conditions:
1. It qualifies as a furnished holiday let (FHL). It is essential that all of HMRC’s occupancy conditions for an FHL are met, which include a rule that the property ‘must be available for letting as furnished holiday accommodation letting for at least 210 days in the year’. For more information about FHL regulations, read our dedicated article, here.
2. The occupant is not responsible for paying the energy bills.
“The property must meet all the conditions of a furnished holiday let as defined byA guide to energy performance certificates
HMRC and the occupant must not be responsible for the energy costs in order for
an EPC not to be necessary. Please see the glossary for the full definition of a
Furnished Holiday Let.“
for the marketing, sale and let of dwellings, published December 2017
So, if you’re planning to buy and run a holiday home, you can rest easy in the knowledge that – subject to meeting the conditions above – you should not need to provide an EPC.
The information contained in this article is accurate at the time of writing, based on our research. Rules, criteria and regulations change all the time and so please speak to one of our Consultants to confirm the most accurate up to date information. Nothing in this article constitutes financial advice. Please always consult your accountant or solicitor for all financial, taxation or legal matters. Your home may be repossessed if you do not keep up repayments on your mortgage. Pure holiday let, buy to let and commercial mortgages are not regulated by the FCA.