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RICS Urges UK Government To Lower VAT Rates For Empty Houses

by Robin Pilgrim,, London

24 December 2008

The UK government needs to lower the rates of Value Added Tax (VAT) levied on empty houses if it is to bring many of the UK’s 762,635 empty homes back into use, is a recommendation from the Royal Institution of Chartered Surveyors (RICS).

According to research from RICS, there are currently around 1.6 million households on council housing waiting lists, and RICS estimates homes could be found for most, if not all, if the Government was to take the appropriate steps to bring empty properties back into use.

Although the Government has announced a raft of measures to help homeowners avoid being repossessed, little is currently being done to help those who don’t have a home.

Local Authorities have the power to issue ‘Empty Dwelling Management Orders’ (EDMO) on properties that have been vacant for six months or longer, but the Government needs to make it more attractive for empty property owners to rent their properties by reducing VAT on the renovation and repair of buildings from 15% to 5%, says RICS.

The Government has taken small steps by introducing such a discount for properties that have been empty for more than two years; now it needs to go further and offer the discount to all properties, says RICS.

Bringing empty homes back into use as quickly as possible will provide an added boost to housing supply in areas where demand is high, and provide much needed regeneration in low demand areas preventing them from tipping into serious urban decline.

RICS policy officer, James Rowlands explained:

“As people spend Christmas at home with their families they should spare a thought for the many people who are homeless and in temporary accommodation at this time of year. Thousands of homes should not be allowed to stand empty while people are homeless or suffering from poor living conditions. The Government must use all its powers to bring these homes back into use by reducing VAT on repair of buildings and reinforcing council powers. Rather than allowing homes to sit empty, everyone should be able to celebrate Christmas in a home of their own.”

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