This week’s Budget statement will present the Chancellor Philip Hammond with a prime opportunity to address the inequality in VAT between new builds, charged at 0%, and renovations, rated at 20%, according to Carol Peett, managing director of West Wales Property Finders.
Peett suggests that a much fairer solution would be to bring it in line with the 5% VAT rate that is chargeable on renovating a dwelling that has been empty for at least two years.
Her vision is that the current housing shortage could be alleviated by encouraging people to extend their living space, enabling a property suitable for a couple to be converted into one able to house a family.
Peett said: “We have personal experience of the gulf between VAT on a new build and on a renovation.
“When we inherited our traditional Pembrokeshire long house it was in dire need of an overhaul. We were advised that it would be cheaper to knock it down and start again, which would have been sacrilege.
“We bit the bullet and undertook a huge renovation programme incurring 20% VAT but many in our position would make the more rational decision and properties such as ours would be lost to future generations.”
The articles are for information purposes only and Invest for Property shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.
Invest for Property does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.
Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.