The Government has launched a consultation on the proposed design of a new tax on the largest residential property developers to help contribute to the cost of cladding remediation work.
The time-limited, UK-wide tax, which was first announced in February 2021 and is due to apply from 2022, is expected to raise at least £2 billion over a decade.
“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 Treasury said, adding that the tax would “strike the right balance between developers making a contribution and ensuring fairness for the taxpayer”.
The consultation asks for views on a range of proposals including that:
- The tax would apply to a measure of developers’ profit from UK residential development;
- it would only apply to in-scope profits over £25 million;
- it would apply to conversion of existing buildings as well as new construction.
Financial Secretary to the Treasury Jesse Norman said: “Ending the use of unsafe cladding is a priority for the government, as it builds back better from the pandemic. 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.”
The consultation, which can be viewed here, closes on 22 July 2021.