Following the deadline to submit representations for Budget October 2021 last week, Melanie Leech, Chief Executive, British Property Federation commented:-
“As we start to recover from the pandemic, the real estate sector stands ready to help build back better and deliver on some of the biggest challenges of our time: to help meet our net zero carbon targets; to level up our towns and cities; and to support the creation of new homes.
“Our town centres need urgent help – the Chancellor must radically reform the business rates system. The system needs to be much better at responding to and reflecting up-to-date rental values. Even before the pandemic struck, retail rents outside of London had fallen by around 50% over the past decade. We recommend reverting to a tax rate of no more than a third of rents.
“Next on the Chancellor’s to-do list should be to zero rate VAT on repairs and maintenance of residential buildings to ensure that tax is not a blocker to anyone wanting to improve the energy efficiency of their own home.
“The need to invest in development across the country has never been greater, and with the right fiscal framework, the Government can remove unnecessary barriers and attract investment – creating and supporting jobs throughout the country.”
Summary of British Property Federation Budget Representation:
Build back greener, by decarbonising the build environment
Our sector has a critical part to play in decarbonisation and meeting net zero commitments. Property owners are already developing net zero plans for their assets, but Government can accelerate this work and stimulate wider economic growth by:
- zero rating VAT on repairs and maintenance of residential buildings, to ensure that tax is not a blocker to anyone wanting to improve the energy efficiency of their own home;
- using the business rates system to incentivise investment in more carbon efficient buildings;
- changing capital allowances to accelerate tax relief on work to decarbonise the sector; and
- broadening the asset classes that a Real Estate Investment Trust (REIT) can invest into, so it can provide a route to channel investment into activities such as renewable energy generation
Build back fairer, by levelling up investment in our towns and cities
Our sector is a significant investor in UK towns and cities. The Government can harness that investment and deliver on the levelling up agenda by:
- radically reforming the business rates system and cutting the overall burden of taxation, increasing the frequency of revaluations, extending empty rates relief and abolishing downward rates phasing;
- accelerating the renewal of our high streets by providing seed funding to pilot Town Centre Investment Zones; and
- reviewing the way Company Voluntary Arrangements (CVAs) are used, and working with the sector to increase transparency and investor confidence.
Build back faster, by boosting investment in the supply of new homes
Our sector is experiencing huge growth in investment in homes. Government can harness further investment by:
- increasing funding for social and affordable housing;
- ensuring that new taxes on residential development are proportionate and targeted, and do not deter new investment;
- helping young renters step more quickly into home ownership, by allowing their rental deposits in Government approved schemes to count towards Lifetime ISA incentives; and
- working to ensure that reforms to the UK Funds regime deliver for real estate investors and continue to make the UK the destination of choice for global investment.