Earlier this year, the government announced a plan to introduce a new Residential Property Developer Tax to raise revenue in order to address building safety defects and in particular the removal of unsafe cladding in the aftermath of Grenfell. The government also plans to introduce a levy on planning permission for high-rise buildings.
The tax is expected to be introduced in April 2022, is intended to be time-limited and will apply to the larger residential property developers. The tax rate has not yet been set but will apply to profits in excess of £25m per annum.
The consultation on what that policy might look like recently came to an end and we continue to await an announcement on the further details of how this tax will operate.
With only a number of months until the tax is implemented, it will be interesting to see if larger developers will factor the increased tax burden into the purchase price of a development site and whether it will have any impact on build-out rates. Watch this space…
This article is for general information only and does not, and is not intended to, amount to legal advice and should not be relied upon as such. If you have any questions relating to your particular circumstances, you should seek legal advice.