New Home Owners And Snagging Forum
Advice on buying a brand new home => General discussion => Topic started by: The Prophet on April 18, 2012, 11:44:18 am
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It is ridiculous that 20% VAT is levied on the repair, renovation and extension of existing homes but not on the sale of newly built homes.
Taxing the repairs and improvement of existing homes not only hurts small builders, it discourages energy-saving measures.
It also penalises the development and improvement of the 930,000 empty homes in Britain and makes building new homes on greenfield sites more tax-efficient.
House builders will always charge the market rate for their new homes.
If VAT was levied the cost would come out of house builder's profits and shareholder dividends not higher prices for new homes.
No one would buy one if they increased prices to recover the VAT. Why would anyone pay a 5-20% premium for a new home?
It is only by ongoing lobbying by the HBF and other interested groups that is keeping N
VAT on new homes from being introduced.
A standard rate of 5% VAT charged on both new and older properties which would be revenue-neutral.
Alternatively reducing VAT on renovations of older homes to 5% would cost just £864million a year but could generate £1.7billion stimulus to the economy and create 60,000 jobs.