Stamp duty rebates for buyers who make their homes more energy efficient and for pensioners downsizing are among the tax breaks the property industry would like in the forthcoming budget.

The National Federation of Builders, NFB, wants a stamp duty rebate given to homeowners who improve the energy performance ratings of their place to ‘C’ or above within two years of purchase. They also want the tax to be scrapped for new build homes with ‘A’ grade efficiency ratings.

NFB policy and market insight head Rico Wojtulewicz said: “As the rebate wouldn’t be paid immediately, the government would also benefit from holding stamp duty for a period of time.”

While the Homebuilders Federation, HBF, would like pensioners downsizing not to pay stamp duty which they claim would increase property transactions by half to about 150,000 a year.

HBF communications director Steve Turner said: “Helping more people who wish to downsize would not only support their independent living and generate significant savings for the NHS but would also help younger families looking for a family sized home in prime locations.”

Home for Later Living Group research reveals a quarter of those aged over 65 want to downsize translating to nearly one million owner-occupier households.

“Based on Government targets of 300,000 new homes a year, this should include 30,000 retirement properties, or one tenth of overall housing delivery,” said Mr Turner.

Scrap 20 per cent VAT tax on green retrofits

The British Property Federation, BPF, wants VAT on green retrofit repairs to existing homes and commercial buildings removed to help the UK meet its net-zero 2050 target.

BPF chief executive Melanie Leech said: “The chancellor must acknowledge the scale and complexity of the challenge to decarbonise our older building stock in particular and create tax and financing incentives that can unlock investment.”

The NFB is calling for homes built before building control regulations came into force in the mid-1960s to have VAT reduced to five per cent to repair work to make them energy efficient. They calculate there are 12.5m such homes in the UK, many dating from before 1915, when traditional construction methods such as suspended timber floors or lime plaster were used.

Mr Wojtulewicz said targeting the hardest buildings to make energy efficient would save these properties and create a pool of skilled workers.

“Such a scheme would also lower the impact of VAT loss if the scheme was for all retrofitting works and encourage greater building reuse, rather than seeing buildings demolish.”

The BPF is pressing for an upfront ‘green tax credit’ to support energy efficiency improvements to commercial properties.

“This is particularly important where viability is challenging, such as the upgrade of heritage buildings or social housing,” said Ms Leech.

Housebuilders also want to see schemes introduced to help first-time buyers with the HBF proposing an equity loan scheme requiring just a five per cent deposit. They suggest the government could match this with a 15 per cent equity loan enabling homebuyers to access mortgage deals at lower rates.

The NFB is proposing that the help-to-buy scheme, scrapped in March 2023, be re-introduced for those wanting to buy a new home on a small development of up to 40 homes. They are also proposing it should be targeted for those most in need such as local first-time buyers with a growing family or single people.

Brokers Hank Zarihs Associates development finance lenders supported helping first-time buyers access lower loan-to-value mortgages would bolster SME developers building homes for local people.

Biodiversity net gain pushing small housebuilders over the edge
Small Site Pipeline: SME Housebuilders' Step