The government has released details of a new property tax.
It’s the Residential Property Developer Tax, first announced at the start of the summer as a way of funding remediation on properties with dangerous cladding.
However, the government’s announcement over the weekend fails to say what the rate of the tax will be - this is expected to be revealed at the Budget in just over two weeks’ time. In the meantime the government says its aim is to make “the largest developers make a fair contribution to help fund the government’s cladding remediation costs.”
This is what we know so far.
The tax will be applied from April 1 2022 to most new developments, regardless of whether they have relevant cladding at their properties.
The new tax will be levied on developers who are already paying corporation tax and will be applied to developments that are predominantly residential in nature.
The government says it aims to raise £2 billion through this tax by the end of this decade.
It’s expected to apply to converted properties - so, for example, an office block converted to residential.
The value of gardens and grounds will also be considered when evaluating the new tax on the overall development.
Here is the draft legislation issued over the weekend.
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Brilliant plan from the Government!!
At a time when there's a housing shortage let's deter people building housing or converting disused commercial to provide housing, and for those properties that are devloped push up the cost and consequent sale price.
What could go wrong?🤔🤔🤔
As if they couldn't screw up any more..... heeer's Johnny
It won't lead to a drop in productivity. All that will happen either with or without the now delayed reforms to the planning system is that councils will come under pressure to approve schemes they wouldn't have normally done and for developers to increase the GDV of a site to pay for the tax and maintain their margin. Government has made no secret of the fact they want to relax the rules on planning to increase production. Instead of 15 houses per acre it will be 16, another storey to each block of flats, and permissions given that would normally have been refused. If councils resist, the planning inspectorate will simply overrule them.
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