EPC C cost cap exemptions: how the £10,000 limit works in practice
EPC C cost cap exemptions decide what happens when a rented home cannot reach C for £10,000 or less. This guide shows how the cap is counted, how the lower cap for cheaper homes works and what evidence to keep. It uses worked examples. The rules are confirmed policy, not yet law.
Published 21 October 2026. Last updated: 21 October 2026. Reviewed by Yasir Khan, Retrofit Coordinator at LAMTANS Engineering.
Law status, checked 21 October 2026: confirmed government policy, to be legislated. Legislation is targeted for 2027. Our EPC C 2030 guide gives the full timeline and the list of exemption types.
Check my property against the cap
How the cap is counted, step by step
The cap is the most you will be required to spend on one property. The government describes it as the maximum landlords will be required to invest over a 10-year period. It applies per property, not per landlord.
Four kinds of money count towards it:
- Your spend on qualifying measures installed since 1 October 2025.
- Other third-party funding, including Warm Homes: Local Grant and ECO4.
- Reasonable EPC assessment costs.
- Some specialist retrofit advice, with amounts to be set in legislation and guidance.
Boiler Upgrade Scheme funding does not count. Your own spend alongside it can still qualify.
Why grants use up part of the cap
A grant lowers your bill, but it also fills part of the £10,000. So a fully funded first property can reach the cap without you spending anything. Read the grants for landlords guide before you plan around funding.
What happens when the cap is reached
Once you have spent up to the cap and the home still falls short, you can register a cost cap exemption. The government says it lasts 10 years. You must register it. It is not automatic.
The property value adjustment for cheaper homes
The government has confirmed a property value adjustment. For a home valued below £100,000, the cap is £10,000 or 10% of the property's value, whichever is lower. This also gives a 10-year exemption.
The published response does not say how value is determined or what valuation evidence is accepted. We will update this page when that is set out. Until then, do not assume that an agent's rental appraisal or a mortgage valuation will be accepted.
Where the lower cap bites
A home valued at £80,000 has a cap of £8,000. A home valued at £100,000 or more has the full £10,000.
EPC C cost cap exemptions in practice: four homes
This EPC cost cap worked example uses four rented homes. They are illustrations of the arithmetic, not quotes or predictions. The figures are round numbers chosen to show the rules.
| Home | Value | Cap that applies | Counted so far | Position |
|---|---|---|---|---|
| A: terrace | £85,000 | £8,500 (10% of value) | £2,400 own spend | £6,100 left before the cap |
| B: semi | £140,000 | £10,000 | £4,000 own spend plus £6,000 grant | Cap reached, exemption possible if still short of C |
| C: detached | £250,000 | £10,000 | £1,500 own share of a heat pump; £7,500 Boiler Upgrade Scheme grant | £8,500 left, as the grant is not counted |
| D: terrace | £95,000 | £9,500 | Nothing yet | Cheapest recommended measure quoted at £11,000 including VAT, so the high cost route applies |
Home D is the interesting case. The high cost exemption applies where even the cheapest recommended improvement would exceed the cap, including VAT. If more than one route fits, ask your assessor which one the evidence supports best.
High cost exemption and the other routes
The pillar guide lists every exemption and its length. This table adds what triggers each one and what records are worth keeping. The trigger wording follows the government response of 21 January 2026. The records column is our advice, not a legal list.
| Exemption | What triggers it | Records worth keeping |
|---|---|---|
| High cost | Even the cheapest recommended improvement exceeds the cap, including VAT | Written quotes showing VAT, and the assessor's recommendation list |
| Property value adjustment | Home valued below £100,000, so the cap is 10% of value | A dated valuation. The accepted type is not yet published |
| Solid wall insulation opt-out | Solid walls, with wall insulation the only measure left against the fabric standard | Wall type survey, the recommendation report and the decision not to proceed |
| Negative impacts | Evidence that a measure would harm the building | A survey or expert report, dated photographs, damp or structural findings |
| Third-party consent refused | A tenant, superior landlord or planning authority refuses consent | Dated written requests and the refusals |
| New landlord | You newly took on a property with sitting tenants | Completion date and tenancy start date |
Exemption evidence: what to keep and why
Exemptions are registered on the PRS Exemptions Register, which the government is redeveloping. Local authorities can review what you register. Giving false or misleading information can itself bring a fine of up to £30,000 per property.
The response says landlords must be able to evidence an exemption. It does not list the documents. Local authority respondents asked for exemptions to be well evidenced and quality checked.
So build a file for each property now. Put the current EPC in it. Add every invoice, certificate and dated photograph.
Keep the paperwork in one place
Store scans together, named by property and date. A tenant's refusal of access, a contractor's survey and a quote all matter later. A record built over four years is far stronger than one rebuilt in 2030.
Use accredited advisers
Evidence from an accredited assessor or retrofit professional carries more weight than a landlord's own opinion. Ask who is lodging the certificate and what scheme they belong to.
Open questions on the cost cap
Some points are still undecided. Treat these as unknowns, not as promises.
- Portfolio pooling: the government says it will explore multiplying the cap by the number of properties you own and pooling it. No decision has been made.
- Valuation method: not yet published for the value adjustment.
- Amounts for assessment and advice costs: to be set in legislation and guidance.
- Numeric EPC C thresholds on the new certificate: not yet published.
Next steps for landlords
Work through these in order.
- Find each property's current EPC and its date.
- Estimate its value, so you know whether the 10% rule could apply.
- Keep every receipt from 1 October 2025 onwards.
- Get an assessment before you buy measures. See how to improve an EPC rating for the order that works.
- Compare the plan with the cost of reaching EPC C.
Our adviser tip, from a Retrofit Coordinator: write the date and the property address on every invoice when it arrives. Spend only helps you if you can prove which property it was for and when it was installed.
Who we are
Compliant Lets is a trading name of LAMTANS Holdings Ltd. Retrofit work is delivered by LAMTANS Engineering Ltd. Check the registers yourself: TrustMark, RECC, ICO, Gas Safe Register and Simply Certification.
We assess the property, explain which exemption may fit and keep the evidence trail with you.
Book a free retrofit assessment
Sources
- GOV.UK: Improving the energy performance of privately rented homes, government response, checked 21 October 2026
- GOV.UK: Improving the energy performance of privately rented homes, consultation page, checked 21 October 2026
- GMCA: Warm Homes Local Grant, privately rented scheme, checked 21 October 2026
Designed & developed by LAMTANS Technologies LLC, USA — part of the LAMTANS Group
Frequently asked questions
What is the EPC C cost cap?
It is the most a landlord will be required to spend on one property to comply, set at £10,000 over a 10-year period. It is confirmed government policy, not yet law. Legislation is targeted for 2027.
Is the cap lower for cheaper homes?
Yes. For homes valued below £100,000, the cap is £10,000 or 10% of value, whichever is lower. A home worth £80,000 would have a cap of £8,000.
Does grant money count towards the cap?
Yes for Warm Homes: Local Grant and ECO4. Boiler Upgrade Scheme funding does not count. Your own spend alongside that grant can still qualify.
Does spend before the law starts count?
Spend on qualifying measures installed since 1 October 2025 can count once the regulations apply. Keep invoices and certificates, because you will need to prove what was installed and when.
Do I have to register an exemption?
Yes. Exemptions are recorded on the PRS Exemptions Register and are not automatic. False or misleading information can be fined, so keep evidence for every claim.
How long does a cost cap exemption last?
The government says the cost cap exemption lasts 10 years. The property value adjustment and negative impacts exemptions also last 10 years. Most other exemptions typically last 5 years.
Can I pool the cap across my portfolio?
Not yet. The government says it will explore multiplying the cap by the number of properties and pooling it. No decision has been made, so plan for the cap per property.
Will a cheaper home need a valuation?
Probably, but the accepted valuation method has not been published. Keep a dated valuation and watch for the guidance before paying for a formal report.