The Chancellor’s Budget announcement of a 4% tax on the profits of large residential property developers will add costs and impact the building of affordable homes.
Phil Kinzett-Evans, partner at our Newbury office, comments: “From 1 April 2022, this new tax imposes further costs on an industry that already has to deal with multiple targeted taxes like Section 106 and the Community Infrastructure Levy.”
“When property developers are already facing rising raw material costs, a skills shortage driving up wages and spiralling energy prices, introducing another tax is going to be a tough pill to swallow.”
“The pain will be felt particularly keenly by large corporate developers who focus on affordable housing where margins are already thinner. It could well trigger more developers to look to higher-margin markets like prime residential property. It remains therefore to be seen what impact this will have on Government targets to meet affordable housing demand.”
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