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The Government has launched a consultation on introducing a new developer tax, which would see developers contribute to the cost of remediation of buildings.
The proposed design would mean tax only applies to profits from residential development over £25m and is looking to raise around £2bn.
Housing Secretary, Robert Jenrick, said: "We’re making the biggest improvements to building safety standards in a generation, investing over £5bn helping to protect leaseholders from the cost of replacing unsafe cladding on their homes and ensuring industry is held to account for the wrongs of the past.
"This tax will strike the right balance between developers making a contribution and ensuring fairness for the taxpayer."
Financial Secretary to the Treasury Jesse Norman said: "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.
"The government wants to ensure this tax is proportionate and works as intended, which is why it is launching this consultation today."
The government is calling for views on proposed design features of the tax including proposals that:
- it would apply to a measure of developers’ profit from UK residential development
- it would only apply to in-scope profits over £25m
- it would apply to conversion of existing buildings as well as new construction
Ministers intend to set out the rate of the tax at a future fiscal event. The time-limited tax is due to apply from 2022 and is intended to raise at least £2bn over a decade.
Thangam Debbonaire, Shadow Housing Secretary, said: "The Conservatives have dragged their feet at every stage since the Grenfell tragedy and hundreds of thousands of people still live in dangerous flats.
“Even with this levy, the burden would still overwhelmingly be on blameless leaseholders - while many of those who caused this crisis will get off lightly.
"Labour will keep fighting to protect leaseholders from unfair costs. This fight is not over."
You can see the full consultation here.