Navigating Energy Performance Certificate (EPC) requirements can feel overwhelming for landlords, particularly when trying to understand which properties might qualify for an exemption. While most rental properties in the UK require a valid EPC, there are specific circumstances where a property can be legally exempt from these requirements.
Understanding EPC exemptions is crucial for landlords who want to remain compliant while avoiding unnecessary costs or penalties. However, it’s important to recognise that exemptions aren’t a loophole to avoid energy efficiency obligations entirely they exist to account for genuine practical or legal barriers to meeting standard EPC requirements. This guide explains when a property is exempt from EPC, how exemptions work under UK law, and what landlords must do to remain on the right side of regulations.
What Is an EPC Exemption?
An EPC exemption is a formal recognition that a property cannot reasonably comply with standard Energy Performance Certificate requirements or minimum energy efficiency standards. These exemptions must be registered with the appropriate authority and are typically valid for a fixed period, usually five years.
There are two broad categories of EPC exemptions:
Permanent exemptions apply to properties that are fundamentally unsuitable for EPC assessments due to their characteristics—such as listed buildings or places of worship. These properties never require an EPC certificate under normal circumstances.
Temporary exemptions relate to the Minimum Energy Efficiency Standards (MEES) regulations, which require rental properties to achieve at least an EPC rating of E. If a landlord cannot reach this standard despite making reasonable efforts, they may qualify for a temporary exemption that must be renewed periodically.
Understanding which type applies to your property is essential for maintaining legal compliance and avoiding enforcement action.
Also Read: Minimum EPC Rating Requirements for Landlords (2026): A Complete UK Compliance Guide
When Is a Property Exempt from EPC?
Several property types qualify for permanent EPC exemptions under UK regulations:
Listed buildings are often exempt when alterations required for energy efficiency improvements would unacceptably alter their character or appearance. However, not all listed buildings automatically qualify exemptions apply only when improvements would conflict with conservation requirements. Landlords should seek specialist advice to determine if their listed property qualifies for exemption.
Buildings scheduled for demolition don’t require an EPC if they have a valid enforcement notice or a demolition consent. This exemption exists because investing in energy efficiency improvements for a building with a limited lifespan serves no practical purpose.
Stand-alone buildings with a total useful floor area under 50 square metres are exempt from EPC requirements. This typically includes small garages, storage units, or tiny outbuildings that function as independent structures.
Places of worship and buildings used primarily for worship are permanently exempt, recognising their unique architectural and cultural significance.
Temporary buildings with a planned use of two years or less qualify for exemption, such as site offices or temporary accommodation structures.
Buildings with low energy demand including unheated structures or those requiring minimal climate control may be exempt. This often applies to agricultural buildings or industrial structures with specific uses.
Short-term holiday lets with rental periods under four months per year can be exempt from EPC requirements, though this depends on actual letting patterns rather than intentions.
EPC Exemptions for Landlords (MEES Context)
For landlords, the most relevant exemptions relate to the Minimum Energy Efficiency Standards introduced under MEES regulations. Since April 2018, all new tenancies must achieve at least an EPC rating of E, with this requirement extending to existing tenancies from April 2020.
The minimum EPC rating for landlords creates a compliance threshold that must be met before a property can be legally let. Properties rated F or G cannot be rented unless a valid exemption is registered. This represents a significant shift in landlord responsibilities and underscores the government’s commitment to improving energy efficiency across the private rented sector.
What qualifies for EPC exemption under MEES is specifically defined, and landlords cannot simply choose to claim an exemption. Each exemption type requires specific evidence and must be formally registered on the PRS Exemptions Register before it becomes legally valid.
Misunderstanding these rules carries serious consequences, including civil penalties and enforcement action by local authorities.
Common EPC Exemptions Explained
MEES regulations provide several exemption categories for landlords who cannot achieve the minimum E rating:
Consent Exemption
This applies when you cannot obtain necessary consent for energy efficiency improvements. For example, if you’re a leaseholder who requires freeholder permission for installation work, or if you need listed building consent that has been refused, you may qualify. The exemption requires documented evidence of refusal or inability to obtain consent.
Devaluation Exemption
If independent professional advice confirms that energy efficiency improvements would reduce the property’s market value by more than 5%, you can claim a devaluation exemption. This typically requires a formal valuation report from a qualified surveyor demonstrating the financial impact of proposed improvements.
High-Cost Improvement Exemption
Landlords can claim this exemption when all relevant energy efficiency improvements would exceed the cost cap (currently £3,500 including VAT). You must obtain three quotes for improvements and demonstrate that even the lowest-cost option exceeds the threshold. Importantly, you must still undertake any improvements that fall within the cost cap before claiming the exemption for remaining measures.
All Improvements Made Exemption
If you’ve already installed all recommended energy efficiency measures for the property including all measures with a payback period of seven years or less—but still cannot achieve an E rating, this exemption applies. You’ll need evidence of all improvements completed and confirmation that no further cost-effective measures are available.
How to Register an EPC Exemption
EPC exemption registration is mandatory and must be completed through the PRS Exemptions Register, the government’s official online system for recording MEES exemptions.
To register, you’ll need to provide:
- Property address and EPC reference number
- Details of the exemption type claimed
- Supporting evidence demonstrating why the exemption applies
- Information about your tenancy arrangement
Evidence requirements vary by exemption type but typically include professional reports, refusal letters, improvement quotes, or photographic documentation. The exemption remains valid for five years from the registration date, after which you must reassess the property’s status.
EPC exemption requirements are strict simply believing your property qualifies isn’t sufficient. Without formal registration, you’re legally non-compliant even if you legitimately meet exemption criteria.
Landlords should maintain copies of all evidence submitted, as local authorities may request this documentation during compliance checks.
What Happens If You Don’t Register an EPC Exemption?
Failing to register an EPC exemption or renting a sub-E rated property without one exposes landlords to enforcement action by local housing authorities. Under energy efficiency exemptions landlords legislation, penalties can be severe.
Local authorities have powers to issue compliance notices and impose financial penalties. The maximum fine for renting a non-compliant property is £5,000 per property per breach. For properties in breach for more than three months, penalties can reach £4,000 plus publication of breach details on a public register.
These EPC penalties for landlords are designed to ensure compliance rather than generate revenue, but they represent a significant financial and reputational risk. Beyond fines for EPC non compliance, landlords may face difficulties with insurance coverage, mortgage lenders, and tenant relationships.
The good news is that penalties are entirely avoidable through proper documentation and registration when legitimate exemptions apply.
EPC Exemptions vs EPC Improvements
A crucial point for landlords to understand is that exemptions should not be viewed as a permanent solution or a way to avoid energy efficiency responsibilities altogether. The EPC exemption law UK establishes exemptions as a temporary measure when improvements are genuinely impractical or impossible.
Where possible, investing in how to improve EPC rating offers long-term benefits including reduced void periods, higher rental values, lower tenant energy bills, and improved property value. Modern tenants increasingly prioritise energy-efficient homes, making EPC improvements a competitive advantage.
Government EPC exemption guidance emphasises that exemptions exist for legitimate barriers, not as a cost-saving measure. As technology advances and costs decrease, measures that once seemed unaffordable may become viable. Landlords should regularly review their exemption status and consider implementing improvements when circumstances change.
Many EPC improvement measures offer relatively quick payback periods through reduced heating costs and improved property appeal.
EPC Exemptions for Commercial & Mixed-Use Properties
EPC exemption for commercial property operates under slightly different rules than residential regulations. Commercial properties require an EPC when built, sold, or let, but MEES regulations also apply to commercial lettings with their own exemption framework.
Mixed-use properties those combining residential and commercial elements—require careful assessment to determine which regulations apply to each section. The dominant use typically determines classification, but properties with substantial mixed use may require multiple EPCs or exemptions.
Commercial landlords should note that EPC exemption criteria can differ, particularly regarding cost caps for improvements and acceptable evidence for exemptions. Professional advice is strongly recommended for non-residential properties.
Key Mistakes Landlords Make with EPC Exemptions
Understanding common pitfalls helps landlords avoid compliance issues:
Assuming exemption without registration is perhaps the most frequent error. Many landlords believe their property qualifies for exemption but fail to complete formal registration, leaving them legally non-compliant.
Not maintaining evidence can cause problems if authorities request documentation. Even after successful registration, landlords should retain all supporting documents for the exemption’s duration.
Letting exemptions expire without renewal or reassessment creates compliance gaps. Set reminders well before your five-year exemption period ends to review your property’s status.
Misinterpreting listed building status leads some landlords to assume automatic exemption. In reality, listed status alone doesn’t guarantee exemption—you must demonstrate that improvements would harm the building’s character.
Failing to implement affordable improvements before claiming high-cost exemptions violates MEES requirements. You cannot claim an exemption while overlooking cost-effective measures that would improve your rating.
Conclusion
EPC exemptions for rental properties provide necessary flexibility within the UK’s energy efficiency framework, recognising that some properties face genuine barriers to meeting standard requirements. However, exemptions come with significant responsibilities proper registration, evidence gathering, and periodic renewal are essential for legal compliance.
Landlords should view exemptions as a last resort rather than a first choice, pursuing improvements wherever practical. Not only does this approach ensure long-term compliance as standards tighten, but it also delivers tangible benefits through improved property value and tenant satisfaction.
If you’re uncertain whether your property qualifies for an exemption, professional guidance on EPC certificate requirements can clarify your position and help you navigate registration processes correctly. Remember that compliance isn’t just about avoiding penalties it’s about maintaining professional standards and contributing to the UK’s energy efficiency goals.
By understanding when is a property exempt from EPC and following proper procedures, landlords can confidently manage their obligations while maintaining successful, legally compliant rental businesses.
