The government has launched a formal consultation process on a new residential property developer tax which is to contribute towards cladding repair work. \r\nThe proposed tax would apply only to developers’ profits over £25m – an idea first mooted in February as part of a £5 billion package to pay for the remediation of unsafe cladding on high-rise residential buildings.\r\n\r\nA statement issued by the Ministry of Housing, Communities and Local Government says that the government believes it is right that residential property developers – “who will benefit from the restoration of confidence to the housing market” – should help fund the significant costs associated with the removal of unsafe cladding. The tax will raise a predicted £2 billion for the remediation and will serve two purposes – as a general tax on housebuilder profits and also a ‘gateway’ tax for those applying for consent to develop high-rise buildings.\r\n\r\n

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Housing Secretary Robert Jenrick says: “We’re making the biggest improvements to building safety standards in a generation, investing over £5 billion helping to protect leaseholders from the cost of replacing unsafe cladding on their homes and ensuring the industry is held to account for the wrongs of the past.\”\r\n\r\n“This tax will strike the right balance between developers making a contribution and ensuring fairness for the taxpayer.”\r\n\r\nAnd the Financial Secretary to the Treasury, Jesse Norman, adds: “Ending the use of unsafe cladding is a priority for the government, as it builds back better from the pandemic.\r\n\r\n“Given the significant costs associated with the removal of unsafe cladding, it is right to seek a fair contribution from the largest developers in the residential property development sector to help fund it.”\r\n\r\nThe consultation wants views on the tax including proposals that it would apply to a measure of developers’ profit from UK residential development, would be levied only on profits over £25m and would apply to the conversion of existing buildings as well as new construction.\r\n\r\nMinisters intend to set out the rate of the tax at a future Budget, but it is time-limited in that it will apply from 2022 and is intended to raise at least £2 billion over a decade.\r\n\r\nYou can see the consultation here.\r\n\r\nI hope this post is useful to you. Please do let me know if you have anything to add, and I will gladly consider it and add to the article if it helps my readers and don’t forget, if you need further advice\/assistance or would like to reach out you can find my contact details below. \r\n

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Josephine – Your Trusted Property Partner\r\n

Tel    : +44 (0) 7491 430055\r\nemail: josephine@josephinedayan.com\r\n\r\n\r\n”,
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