The government has opened a consultation on how its controversial property developer tax should work.
Designed to help raise cash for the £5 billion cladding remediation fund ministers have set up following the outcry over the huge costs many leaseholders were due to face, the tax will be levied on all developers making profits of more than £25 million a year.
The government says ‘it is right’ that house builders, who will benefit from the ‘restoration of confidence’ within the housing market by the fund, should help pay the significant costs associated with the removal of unsafe cladding.
Announced in February, the tax will be UK-wide and be time limited to ten years.
It is expected to raise £2 billion for the remediation fund.
The tax as proposed will be dual and include a general tax on profits and also a ‘gateway’ tax for those applying to develop high-rise buildings.
HM Treasury says the consultation is designed to settle on how these two tax measures will work, including whether conversions as well as new-build residential developments should be included.
Financial Secretary to the Treasury Jesse Norman (pictured), says: “Ending the use of unsafe cladding is a priority for the government, as it builds back better from the pandemic.
“Given the significant costs associated with the removal of unsafe cladding, it is right to seek a fair contribution from the largest developers in the residential property development sector to help fund it.”