By Jude Njoku, (With Agency reports)
Less than three months to the introduction of VAT on listed property, many home owners are frantically trying to complete alteration and restoration work to their listed properties to save thousands of pounds and secure the property’s future for generations to come.
On 1 October 2012, the government is lifting the exemption on VAT to listed buildings, which it terms an ‘anomaly’, and imposing VAT at 20 per cent to all alterations and restorations in a move which will cost owners of listed buildings thousands of pounds just to ensure their property does not fall into disrepair.
The introduction of the 20 percent VAT is already drawing flak from real estate stakeholders. Leading the campaign against the introduction, the Royal Institution of Chartered Surveyors, RICS, as part of its ‘Cut the VAT Coalition’, has called on the government to jettison the move and introduce VAT at five per cent on all home repair, maintenance and improvement works.
RICS’ views were made public by the UK Head of External Affairs, Mr. Stephen Thornton. He noted that the preservation of a listed building involves dedication in time and money due to the more expensive methods and materials required to maintain them.
The chartered surveyors, along with much of the property industry, fear that the extra 20 per cent levied against owners of these buildings will mean these essential works will no longer be financially viable.
The VAT exemption is a very important concession for buildings that require specialist works by specialist trades with specialist materials at specialist prices. Rather than be lifted, I feel strongly that the VAT concession should be extended to include routine maintenance not just capital expenditure.” The Chancellor has missed a golden opportunity to create a level playing field on all residential works.
Research shows that five per cent VAT across the board would create 26,560 jobs in the construction sector with a total economic stimulus of around £1.7 billion in 2012 alone.”
RICS’ view is being echoed throughout the property industry with many lending their voice to the condemnation surrounding the lifting of the VAT exemption.
As a result of the proposed introduction of VAT at 20 percent, many owners of listed properties are rushing to complete works and ensure the survival of the building and Britain’s heritage.