10:44 AM, 18th February 2011, About 12 years ago
Buy to let landlords could benefit from a cut in VAT on repairs and maintenance if Chancellor George Osborne heeds a plea to boost the struggling building sector.
Property organisation the Royal Institution of Chartered Surveyors wants him to slash the rate of VAT on costs of supplies and labour for refurbishing homes.
RICS argues that cutting the VAT rate would create an extra 34,000 jobs by 2019 while stopping tax cheats carrying out ‘cash in the hand’ work.
The proposal is part of the RICS pre-Budget submission with suggestions for the Chancellor to help the property market.
Mark Goodwin, RICS Director of External Affairs, said: “This Budget provides the Government with a chance to encourage growth and innovation in construction and property, providing much needed jobs, tackling the housing shortage and ensuring that businesses have a continuing supply of high quality premises. With house-building at a desperately low level, it is essential that the Government takes steps to attract investment into the residential sector.”
Other suggestions for the March 23 Budget from RICS include reinstating business rate relief on empty properties due to start in England and Wales from April 6 and limiting government spending cuts in the property sector.
RICS points out that property is a significant contributor to the UK economy with every £1 spent on construction going towards £2.84 to economic activity. The industry employs around 900,000 people.
“More strategic and efficient management of public sector property assets has rightly been identified as a golden opportunity for the government to make savings of around £5 billion over the next ten years and release some £20 billion through disposals,” said Mr Goodwin.
“Lead times in property can be lengthy and short-term cuts can have unintended long-term consequences. The success of the government’s emerging strategy on public sector property asset management will depend in no small measure on attracting, retaining and developing talented professionals.”