Energy Performance of Buildings (Scotland) Regulations 2025 - EPC reform consultations: SG response - update

3. Government Response to the Technical Consultation on Energy Performance Certificate (EPC) Reform – Lodgement Fees and Penalty Charges

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3.1 EPC Lodgement Fees and Penalty Charges

We sought views on the future funding of key elements of Scotland’s Energy Performance Certificate (EPC) regulatory regime, and on the level of penalty charges in a technical consultation from February to March 2025. The purpose of this consultation was to seek views on a number of key areas relating to the increase in the statutory fee levied on the lodgement of domestic and non-domestic EPCs in Scotland. Questions related to the proposed increase amount (£), the frequency of reviews, and potential changes relating to penalty charges under the new EPC regulations.

We proposed that EPC lodgement fees would be increased by £3.40, raising the cost of lodging a domestic EPC to £6.00 and a non-domestic EPC to £15.50. We set out that we believed this was a proportionate increase that ensured lodgement fees in Scotland remained within the same range of similar small EU countries.

We set out that when moving to the new EPC regulations, we would need to build a new technical and operational infrastructure to replace current systems which are now life-expired. We showed how we propose to work with the UK Government to maximise sharing of this infrastructure to help to reduce the upfront capital costs and ongoing running costs and to continue to maintain market access to EPC assessors operating across the UK, as required by some of the provisions of the UK Internal Market Act 2020. This has resulted in fee increases which are lower than they would otherwise be.

We proposed that the lodgement fees would be used to support the development of the following elements of operational and technical infrastructure:

• a new EPC Register where certificates can be lodged and made available to prospective property purchasers and tenants;
• a new EPC Calculation Methodology to allow the new EPC ratings and potential improvements to properties to be calculated by assessors using the new UK Home Energy Model
• a new onsite audit and inspection function to ensure EPCs are accurate and reliable and to allow Scotland to maintain alignment with changes that the EU has made to EPCs through revisions to the Energy of Performance of Buildings Directive in 2024. This would represent a significant step forward in enhancing audit mechanisms to improve the overall quality of EPC assessments undertaken, while also building consumer confidence and supporting potential future mandatory standards around energy efficiency.

We did not propose to make changes to current levels of penalty charges, (which are £500 for domestic properties and £1,000 for non-domestic properties), but sought views on whether or not these remained appropriate.

We proposed to review lodgement fee levels, the onsite audit and inspection function, and penalty charge levels, within two years of the regulations coming into force.

As part of the consultation process we held three, two-hour long, online workshops. These provided an opportunity for stakeholders to engage directly with us. A total of 46 individuals attended these workshops.

3.2 Summary of Consultation Responses

In total, 29 written responses were received to the technical consultation on EPC lodgement fees and penalty charges. We have published the responses received on our consultation platform^[9] where the respondent has given permission for us to do so.

The table below provides a breakdown of responses by respondent type:

Table 1: Respondent Profile - Written Responses

* The local authorities included one mainland authority, one rural mainland authority, and one island authority.

Note: this table does not add up to 100% due to rounding.

In addition to the written responses, 46 organisations participated in the consultation workshops. The table below provides a breakdown of the organisations represented at the workshops.

Table 2: Respondent Profile - Workshop Events

*The housing associations included two from mainland Scotland and one island area.

**The local authorities included six mainland authorities and one island authority.

Note: this table does not add up to 100% due to rounding.

Of the 29 written responses received to the 2025 technical consultation on EPC lodgement fees and penalty charges, the analysis of the consultation responses sets out that, overall, between half and two thirds of respondents who answered the questions supported each of the proposals:

• 68% supported the use of a statutory fee levied on lodgement of EPCs to fund the new elements of the regulatory regime;
• 50% supported raising the statutory fees levied upon lodgement by £3.40 for both domestic and non-domestic EPCs;
• 61% supported a review of the lodgement fee level within two years of the new regulations coming into force;
• 57% supported reviewing the onsite audit and inspection function within two years of the new regulations coming into force; and
• 64% supported reviewing the penalty charges issued to those who do not provide a valid EPC within two years of the new regulations coming into force.

Respondents did also note there may be unintended consequences relating to the costs for social housing providers, potential future fee increases, and impacts on rural/ islands areas. We have aimed to address these concerns within the suite of impact assessments accompanying the revised EPC regulations.

Across each of the proposals, most of the opposition came from individuals rather than organisations. On this basis, the Scottish Government has decided that it is appropriate and proportionate to increase the EPC lodgement fee to the level set out in the new regulations, and to review this within two years of the new regulations coming into force.

The Scottish Government has also decided that it is appropriate and proportionate to keep the EPC penalty charge at its current level, and to review this within two years of the new regulations coming into force.

3.3 Scottish Government Response

Wellside Research were commissioned to undertake an independent analysis of responses. The report presents the findings from the public consultation and explains the methodology that was used to analyse responses.

The responses, together with the analysis report, have helped to inform and shape the new Regulations.

In response to the technical consultation on EPC lodgement fees and penalty charges, we can now confirm that we will:

• Amend EPC lodgement fees within the new Regulations (to £6.00 for domestic certificates and £15.50 for non-domestic certificates, as specified at Regulation 15), to ensure that they can cover the costs of providing the technical and operational infrastructure to support the EPC Regulations and which provide benefit to consumers;
• Use the lodgement fees to support the development and delivery of a new EPC Register (Regulation 14), a new EPC Calculation Methodology (Regulation 10, which will be fulfilled by the Home Energy Model and updated SBEM), and to support the establishment of a new onsite audit and inspection function (Regulation 12) overseen by the Scottish Government to ensure continued improvements to EPC accuracy and reliability;
• Retain EPC penalty charges at the level currently set in the 2008 (Regulation 23);
• Review lodgement fee and penalty charge levels every two years to ensure they remain fair and proportionate; and
• Review the onsite audit and inspection function within two years to see if it is fit for purpose and continues to be needed.