New property tax – government releases draft legislation

The government has released details of a new property tax, the Residential Property Developer Tax, first announced at the start of the summer as a way of funding remediation on properties with dangerous cladding.

However, the government’s announcement over the weekend fails to say what the rate of the tax will be – this is expected to be revealed at the Budget in just over two weeks’ time. In the meantime the government says its aim is to make “the largest developers make a fair contribution to help fund the government’s cladding remediation costs.”

This is what we know so far:

The tax will be applied from April 1 2022 to most new developments, regardless of whether they have relevant cladding at their properties.

The new tax will be levied on developers who are already paying corporation tax and will be applied to developments that are predominantly  residential in nature.

The government says it aims to raise £2 billion through this tax by the end of this decade.

It’s expected to apply to converted properties – so, for example, an office block converted to residential.

The value of gardens and grounds will also be considered when evaluating the new tax on the overall development.

Here is the draft legislation issued over the weekend.

Kindly shared by Estate Agent Today

Main article photo courtesy of Pixabay