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Apply full VAT to new build on green land

Comment 16th July 2010

The present VAT system needs to be reversed: at present new build is zero rated while work to existing buildings attracts full VAT. New build on GREENFIELD SITES should have full VAT applied – developers love greenfield because it is cheaper so their profit margins are greater. Introduce a sliding scale of VAT: reduced rate on brownfield development and refurbishment of derelect property, zero rate for 'green' initiatives, lower rates for householders employing certified builders doing the work, to stop the cowboys, cash in hand.  There's lots that could be done with a radical rethink in this area. Properly planned, this could generate more VAT revenue with smaller amounts but coming in from more sources.

Why does this matter?

There is masses of existing derelect and sub-standard housing stock across the country that could be brought up to standard by making it less expensive to do so. We shouldn't need to sacrifice our precious green land. The existing VAT disincentivises a rational approach to our housing requirements. We need to protect our green land; we need to regenerate our cities; we need to improve the standards of our existing housing stock; we need new housing in the right places; we need to protect and foster our home construction industry and its allied manufacturing businesses who need help in this time of recession – we produce everything in this country to build a house – except the timber, which is Scandinavian….

Zero VAT on new build is a hangover from the tax system applied after World War II when we desperately needed new houses. Sixty years on reform is long overdue.

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