Calls to Reduce VAT on Renovations

uk Housebuilders - Renovations

West Wales Property Finders we are renewing our call for the Chancellor to address the inequality in VAT between new build houses, charged at 0%, and renovations, rated at 20%.

Company Calls on the Chancellor to Reduce VAT on Renovations

We suggest 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.

That way 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.

This will help the market throughout the UK and particularly in Wales where, with Labour Assembly’s new Land Transaction Tax charges coming into play in April 2018 meaning those purchasing properties costing between £150,000 – £250,000 will be paying an extra 0.5% tax and those purchasing homes between £400,000 and £925,000 will be paying an extra 2.5% tax, the market for family homes will be severely affected by a bottleneck in the market. Older people will be unable to downsize and this, plus the additional tax payable, will prevent young families from being able to move up the ladder from first time buys to purchase family homes.

Current Stamp Duty Rates in England and Wales

£0 – £125,000 0%
£125,001 – £250,000 2%
£250,001 – £925,000 5%
£925,001 – £1,500,000 10%
Above £1,500,001 12%

New Land Transaction Tax Rates in Wales from April 2018

£0 – £150,000 0%
£150,001 – £250,000 2.5%
£250,001 – £400,000 5%
£400,001 – £750,000 7.5%
£750,001 – £1,500,000 10%
Above £1,500,001 12%

Equality in VAT charges will also help preserve beautiful old properties which currently are being demolished as it is cheaper to knock them down and rebuild than to renovate them.

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