Party leaders urged to cut VAT for green housing revolution

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A coalition of business groups from the property and construction sectors have urged the next UK government to cut VAT on maintenance and home improvements to spur a green housing revolution

A VAT cut on home improvements could generate £15bn in new taxes, create 95,000 jobs and unlock £1bn green housing revolution, according to the coalition.

The Federation of Master Builders and the British Property Federation have predicted that reducing VAT from 20% to 5% on home improvement works would unleash investment in housing, stimulate the economy and enable the UK to transition to a net-zero carbon economy.

Cut the VAT campaign

The coalition has written to each of the four largest parties, asking them to speak for the ‘Cut the VAT’ campaign during the remainder of the General Election and to meet with the coalition in the next Parliament.

The coalition has said the VAT cut is vital to spur on the green housing revolution, with domestic buildings responsible for around 20% of the UK’s carbon emissions.

In addition to improving the standards of homes, a green housing revolution would also help unleash investment in new housing.

The build-to-rent sector provides high quality, purpose-built and professionally managed homes and has grown from fewer than 30,000 homes to 148,000 homes in the last five years. The sector has also delivered a quarter of London’s housing output last year.

By reducing the VAT associated with maintenance and management of build-to-rent, the sector can deliver even more houses.

Melanie Leech, chief executive of the British Property Federation, said: “Reducing the rate of VAT on all repairs, maintenance and management of residential property would support the greening and improvement of our housing stock, and help the build-to-rent sector deliver more homes.

“We therefore urge the next Government to support the Cut the VAT campaign.”

Brian Berry, chief executive of the Federation of Master Builders, added: “An amazing 20 million floors, 8 million lofts and 5 million cavity walls all in need of insulation across the UK, according to the government’s own figures. The four main parties must go further in their policy pledges to promote and incentivise energy efficiency works.

“Given that homeowners tend to complete these tasks as a consequence of larger home improvement works the rate of VAT on repair and maintenance work needs to be reduced from the current 20% to 5%.”

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