Developer levy & residential property development sector tax
16 February, 2021
You'll have seen the Housing Minister's recent announcements on measures designed to raise revenues to fund the removal of unsafe cladding.
There are two main aspects to the revenue raising proposals:
1. The 'Gateway 2' developer levy
This “will be targeted and only apply when developers seek permission to develop certain high- rise buildings in England...". Mr Jenrick indicated that the levy would be introduced through the Government's Building Safety Bill, which was first published in draft last July. The words used by Mr Jenrick appear to suggest that the levy will be introduced on a prospective basis, rather than based on developer profits generated over the last decade, as proposed by Sadiq Khan in December 2020.
Introducing the levy via the Building Safety Bill would also suggest that this aspect of the proposals is more imminent, although it would be usual to allow a period of consultation in respect of new legislation.
2. A UK residential property development sector tax
Described as a new “tax” for the “UK residential property development sector” in 2022, which "will raise at least £2bn over a decade to help pay for cladding remediation costs”. A consultation on the policy “design” was promised in “due course”.
Of course, you'll be interested to ensure that the levy and tax are implemented in a fair way. We'll keep you informed on the consultation processes, and we'll be happy to discuss your concerns and, where appropriate, include them in our response.
Further information
If you would like to discuss this further, please do not hesitate to contact any of the individuals listed below or your usual PwC contact.
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