Residential Property Developer Tax
After SFHA proposed a complete exemption for all non-profit housing providers and wholly owned subsidiary, last week, the UK Government announced one.
SFHA responded earlier this year to the HM Treasury consultation on the introduction of a Residential Property Developer Tax. The UK Government had announced it would introduce a new Residential Property Developer Tax as part of its Building Safety Package. The tax is to be one of the government’s measures to bring an end to unsafe cladding.
SFHA raised concerns that when buying ‘off the shelf’, costs would increase for housing associations with developers seeking to charge more as a result of increased taxation. SFHA said the proposal went against the overall government policy intent by potentially reducing the supply of affordable housing and risks pushing tenants into rent poverty.
SFHA proposed a complete exemption for all non-profit housing providers and wholly owned subsidiary companies and highlighted the concerns from the social housing sector that developers would look to pass on costs where properties are purchased off the shelf.
When the draft legislation was published, ministers had not made a final decision on the treatment of build-to-rent profits and affordable housing. Those decisions have now been made.
The RPDT will have an exemption for non-profit affordable housing providers, including their for-profit subsidiaries.
This week, some final updates have been made to the draft legislation for the Residential Property Developer Tax and the associated Explanatory Memoranda. These are available here.