The government will be introducing a new tax on larger residential property developers to provide funding towards the prevention of unsafe cladding.
Who does this affect?
The 4% tax will only affect companies and/or groups of companies carrying out UK residential property development with over £25 million in annual profits.
Properties related to institutional and charitable uses will be excluded from the scheme – due to their communal nature. Build to Rent developers will also be exempt – however this is to be kept under review.
Objective of the policy
In line with the government’s Building Safety Package, the tax will provide further funding to “bring an end to unsafe cladding, provide reassurance to homeowners and support confidence in the housing market.”
Due to the steep costs related with removing unsafe cladding, the government considers it a fair proposal to have the largest and most prominent property developers to partly aid these funds.