CPRE and the Empty Homes Agency have attacked Gordon Brown’s failure to impose VAT on greenfield development or reduce the rate levied on the refurbishment of empty homes.
They argue the VAT regime encourages an environmentally unfriendly approach to development because new homes built on greenfield sites are zero-rated, while refurbishment of empty homes is subject to the full 17.5%.
Ministers have argued that existing EC VAT rules make it difficult to reduce rates once they have been set at the maximum level. But a new draft EC directive, due to be published shortly, will allow the introduction of a reduced rate for labour intensive services including renovation of houses. This was expected to give the Chancellor room for manoeuvre.
CPRE’s Tony Burton said: “We are disappointed by the failure of the Budget’s environmental measures to do anything other than address climate change. There is a wider environmental agenda on the location of new development, which the Chancellor has not addressed. This is a missed opportunity.”
Ashley Horsey, chief executive of the EHA, said: “The government claims to be promoting brownfield development and looking for urban renaissance, such rhetoric is meaningless if they are not prepared to take real effective action.”
EHA has predicted that as many as 30,000 extra homes could be brought back in to use if the rate of VAT on refurbishing existing empty properties was reduced.
EGi News 10/03/99
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