A new report from think tank Policy Exchange has called for stamp duty to be cut for energy efficient homes and raised for homes that are deemed to be inefficient…
The Policy Exchange says stamp duty should be lowered for homes that are deemed to be energy efficient. In its report, the think tank accused the government of doing too little to cut energy waste, despite these programmes being the cheapest way to cut bills and meet carbon targets.
The report called for stamp duty to be up to £5,000 less for efficient properties than leaky, hard-to-heat homes. Changing stamp duty rules, the think tank estimated, would lead to 270,000 more energy efficient households a year.
Richard Howard, a former chief economist for The Crown Estate, authored the report. He said: “Improving home energy efficiency can save households money, as well as substantially reducing their carbon emissions.
“Policies which link property values more closely to energy performance could kickstart an energy efficiency revolution in this country.”
The government has been heavily criticised for cutting back a number of energy efficiency programmes, including the flagship Green Deal. This aimed to improve the efficiency of homes by improving areas such as insulation.
The report stated: “The UK still has amongst the least efficient housing stock and highest rates of fuel poverty in Europe.”
While the government is working towards improving the insulation of some one million homes during this parliament this is fewer than the 4.5 million in the last parliament.
Policy Exchanges wants the government to lower stamp duty for efficient homes and increase it by the same amount for inefficient homes. This means the tax taken by the government would remain the same.
For a property worth £220,000 this would result in a £500 reduction for an energy efficient property, while a draughty one would see an extra £500 levied. This would not affect properties under £125,000 as stamp duty is not paid on these homes.
Howard said: “The government could nudge people into making improvements to the efficiency of their home, which would not only add a premium to their property but would also reduce their energy bills.”
Other recommendations included the fact affordability calculations made by mortgage lenders should include how much a property costs to heat. More efficient properties would then be able to apply for larger loans.
The report said: “There is huge potential to improve domestic energy efficiency. Research shows that a more ambitious approach to energy efficiency could deliver carbon savings of 24m tonnes of carbon dioxide a year by 2030 – equivalent to taking more than 10 million cars off the road – and save households of £8.6bn a year in energy costs.”
A government spokesperson said: “This government is serious about helping vulnerable people heat their homes and keeping energy bills low – that is why we are requiring energy companies to improve the energy efficiency of over 200,000 homes per year, helping to tackle the root cause of fuel poverty while delivering on the government’s pledge to insulate 1 million homes over the parliament.”
