Budget fails to offer developers incentive to build on brownfield sites

The UK Budget 2000 has not proved the 'green' budget that sustainable housing campaigners were hoping. Building on greenfield sites remains VAT free while building on brownfields or refurbishing an empty building incurs VAT.

The sole concession to ‘green’ housing taxation announced by UK Chancellor Gordon Brown is a reduction in VAT on the installation of insulation systems and solar panels to five percent. The cut comes into effect on 1 April and applies to the installation, but not the sale of:

  • insulation
  • draught stripping
  • hot water & central heating system controls
  • solar panels

Friends of the Earth (FoE) believes the Government’s failure to alter VAT rules for housing development will mean that its own target for 60% building on brownfield sites will not be met (see related story). “They’re not giving a direct incentive to developers not to build on greenfield sites,” a FoE spokesperson told edie.

Although Brown announced that the Government will be consulting on reducing or removing stamp duty for building on brownfield sites, FoE says that stamp duty isn’t a large enough tax to affect developers’ plans.

FoE does welcome the VAT reduction on the installation of insulation and solar panels, but the organisation would have liked to have seen that same reduction on the sale of these items as well.

“We were fairly disappointed with the Budget,” says the FoE spokesperson.

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