The importance of energy certificates when renting out your Spanish holiday lets.
The first and most important issue is the legality of an energy certificate since 2013 and therefore the fines that may result when not having an EPC on holiday rents.
Secondly is the efficiency of the property. Even though it’s a holiday let, it can frequently accumulate rising utility bills. Thinking about how energy-efficient your vacation home is can immediately result in lower running costs and a smaller carbon footprint for your vacation property. An evaluation of your energy performance certificate can show you where improvements can be made.
Since 2013, whether you’ve bought, sold, or rented a house, you’ve likely seen Energy Performance Certificates, or EPCs. With a rating value ranging from A (highly efficient and the best you can hope for in a new well-insulated property) to G (the least efficient and characteristic of an old drafty building), EPCs show how energy efficient a property is.
The typical property grade in Spain and Andalucia is D and more than 28% are G rated. 58% of the properties are still shown without an EPC grade. The cost to obtain an EPC varies from 155 euros to 450 euros.
How is an EPC calculated?
A property’s EPC rating is determined by how much energy it uses per square meter (for lighting, heating, and other purposes) and how much energy it wastes (e.g. through poor insulation).The Standard Assessment Procedure (SAP) score for the property will be calculated by the assessor first, and that score will be used to calculate the EPC rating. Better EPC rating Implies higher SAP score.
Why is an EPC required?
By obtaining an EPC, you can raise the value of your house and lessen its environmental impact. When you are buying, an EPC provides you with information on how energy-efficient a property is. The energy performance certificate (EPC) can help you list some potential costly energy inefficiencies as well as an estimated cost to correct them.
Since 2013 it is legally required to have an EPC to rent property in Spain for more than 4 months a year. There is no minimum level required before your rent as opposed to its European counterparts where since 2008 this requirement extended to rate at least an E and soon to be a D.
Jose Maria Oliva, as a lawyer at Tejada Solicitors Law Firm, recommends that before signing the rental contract for your property, whether it is a long-term or vacation rental, you should have an energy efficiency certificate. This will help you avoid penalties and, most importantly, provide the tenant with necessary information prior to signing the contract. It will allow potential clients to know the energy rating of the property and the savings in electricity consumption, which is an important factor to consider. It will help you establish a higher rental price, and moreover, your property will contribute to less pollution. Potential clients will be more interested in renting this type of property due to the many benefits it offers.
Benefits of a good EPC for landlords and tenants
The benefits of good EPC are many, for both landlords and tenants.
Spending money on heating or cooling that is rapidly lost can be very annoying, and living in a cold house or in a house with no ventilation is not very pleasant. The problem is simple to solve if the building is adequately insulated and draught proofed. Your property’s value will grow with a high EPC rating. Nobody wants to purchase or rent a home that will be extremely expensive to heat and maintain. If you think you might want to sell sometime, keep this in mind, as an A rated property reaches between 7% and 14% more value than G and D rated properties. 65% of the Spanish customer will be willing to pay more for an energy efficient property, as stated by The Economist. Less cost on repairs. For example, a ventilated property will have less damp and condensation repairs at a later time. It also gives access to tax advantages in your tax return by the Spanish Tax Agency.
How to Obtain an energy certificate for your holiday let
Organise and research for a qualified EPC assessor to visit your property. Let the EPC assessor look over your house. Make sure the EPC Assessor has registered the EPC with the appropriate authority, which varies depending on the Autonomous Region that your property is located. Pay the certification cost to get the certificate and the home’s energy efficiency rating.
Finding an accredited energy assessor.
Architects, technical architects and surveyors are the skilled professionals who may complete the energy certificate for any building, piece of land or property as stated in Section “u” of Article 2 of Decree Law 390/2021
What to expect during an EPC inspection.
By visiting the property and conducting a non-intrusive visual examination the energy assessor will examine several components of the building or property while on site, including windows, lighting, boiler, insulation, water tanks, etc. During the assessment the assessor will record the essential information which will be entered into the software afterwards. Following that, your final EPC will be produced.
For a residential property, the inspection itself will normally take 20 to 30 minutes. This may require more time for larger properties. If you have any paperwork on the insulation in your home, you might want to give it to the assessor, to guarantee that the EPC is as precise as possible and that no assumptions are made.
Understanding your EPC report.
An EPC certificate uses a letter scale that ranges from A, the highest, to G, the lowest and comes with a palette of colours that make it possible to identify the most effective. Additionally, it provides details on the annual energy use and carbon dioxide emissions.
Making your home more energy-efficient will reduce your costs over time and make it cosier and warmer to live in during the chilly winter months and cooler during the hot summer months. You can help the environment, cut down on your carbon emissions and increase the value of your property.
Tenants are more likely to rent a property with lower energy bills, especially on short term rentals where the use of air conditioning is popular and where occupancy of the accommodation is, most of the time, the maximum number of people. Taking the steps to make it energy efficient can help the tenant to lower the costs of the energy bills as well as lowering the carbon dioxide emissions to the atmosphere.
Tips for improving energy efficiency.
Here are a few tips to get you going:
Cavity walls should be insulated by filling the gap with insulating material.
Add lining to loft walls and solid walls.
Change your windows to double glazed and add thick curtains or blinds.
Maintain your heat furnaces such as boilers and chimneys in a clean and good state.
Maintain air conditioning systems so they work more efficiently and use less energy.
Automate usage of thermostat, air conditioning and lighting.
Check for drafts under doors and add draft excluders.
The best way to implement Energy efficient measures is to create an action plan, conducting an energy survey, setting saving goals and targets and choosing the appropriate actions.
The action plan should outline the priority order with dates and resources required, including key roles with who will be carrying out such measures.
Actions should be arranged into short, medium and long-term initiatives, as well as cost free, low cost and actions that require capital to be carried out.
It is good to start with no cost and low-cost actions so you can have an immediate impact.
It is very important to realise that Energy Efficient measures are a team effort at every level.
At Tejada Solicitors Law Firm, we have observed that clients who wish to purchase a property in Spain demand homes that have good energy efficiency. This factor contributes to greater profitability and faster sales.
Consequences of not having an EPC for your property.
The fines vary from 600 euros for renting a flat without EPC to 6000 euros when falsifying the information. You should be aware that only technical industrial engineers, technical architects and other trained engineers and technicians are qualified to do this examination. Do not believe a technician who charges you less than 100 euros for an average house of 90 square meters (the fee is determined by the surface area to be evaluated). Also, do not believe a technician who claims that he does not need to visit the property. Finally, if you receive a letter that is among the lowest on the rating scale, a good certificate should mention the modifications you should make to your house to have a higher rating.
Energy Performance Certificates (EPCs) provide details on buildings, properties and business on energy efficiency on a sliding scale ranging from A (extremely efficient) to G. (least efficient). An EPC enables prospective purchasers, tenants, or building occupants to think about a building’s energy efficiency before committing to a contract. With today´s increasing costs of energy bills and climate change awareness, more and more people are finding it extremely important to choose an energy efficient property whether to use as a business, buy a property or rent short or long term.
Idealista News says by 2030, Europe will restrict the sale of properties that do not adhere to the Energy Efficiency Directive. EPC certificates can outline areas of improvement that can benefit all parties involved.
This certification is a European Law and all its states are obligated to comply. The certification lasts 10 years in all European countries.
The Spanish government has put in place financial incentives until the end of the year 2026. The initiative will fund activities that lower the need for heating and cooling by at least 7%, consume 30% less non-renewable primary energy or replace structural parts such as changing the windows. Regarding the available subsidies, the provider responsible for carrying out energy efficiency improvement works can provide you with information in this regard. There are also specialized companies that handle such subsidies. Additionally, there are tax incentives for which we recommend consulting with your tax advisor.
A property must have an energy performance certificate before it may be listed for sale or rent unless it is rented for less than four months per year.
All businesses premises with renewed or new rental contracts need to provide the tenant with an energy performance certificate.
The energy performance certificate must be obtained by the owner of a property if they plan to sell or rent it. The developer is responsible if the building or property is brand new.
Less than 172.3 kWh/m2 annually. Class A being the most efficient consuming less than 44.6 kWh/m2 annually and G, the less efficient, consuming more than 382.6 kWh/m2 annually.
Usually, the energy certificate and proof of registration will be received within a period of between one and five days.