HM Treasury has confirmed that not for profit housing associations and their wholly-owned subsidiaries are set to be excluded from the ‘cladding tax’, or Residential Property Developer Tax, following effective lobbying from the sector.
Earlier this year, HM Treasury launched a consultation on the policy design of the Residential Property Developer Tax, which will be introduced from 1 April 2022. The consultation was clear that maintaining an adequate supply of affordable housing is a priority of government, and sought views on how the supply of affordable housing might be impacted by the new tax.
Andrew Robinson, corporate tax partner at RSM UK, who advised the National Housing Federation on its response to the consultation, reacts to the Government’s decision to exclude non-profit housing associations and their subsidiaries from the Residential Property Developer Tax: ‘We are pleased that the Government has listened to the concerns of the sector and looks set to confirm in the forthcoming Autumn Statement that non-profit housing groups will be exempt from the so called ‘cladding tax’.
‘This will mean that UK housing associations will now have more money to reinvest in affordable housing to help tackle what is widely acknowledged as a housing crisis in the UK. In addition, they will not need to divert internal resources away from their core activities in order to manage their compliance with the complex Residential Property Developer Tax rules; so, can focus on tenant welfare, maintenance and crucial housing development.’