Tax breaks to boost RMI
Published: 03 November, 2009
LONDON: The Empty Homes Agency (EHA) called for tax incentives for renovation work to cut the rising number of empty houses.
Nearly a million buy-to-let properties stand empty and the credit crisis is set to take the number past 1m next year, the agency said.
The majority of properties - more than four out of every five - are believed to be owned by private landlords, the EHA said.
David Ireland, chief executive of the EHA said: "The situation is getting worse. We're at the beginning of a trend of rising empty homes, which is what we have seen at the beginning of other recessions."
The EHA and Halifax bank called on the government to reduce the rate of value added tax payable on renovations. "The 17.5% VAT rate is a huge financial disincentive to refurbish empty properties," Ireland said.
Building work on an empty home attracts full VAT at 17.5%, unless the property has been vacant for more than three years, when a reduced rate of 5% applies. A property has to be vacant for more than ten years to attract a zero rate. "The 17.5% VAT rate is a huge financial disincentive to refurbish empty properties," Mr Ireland said.