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Brown's brownfield budget boost
20 March 2000
Chancellor Gordon Brown may be planning a £500 million boost for urban regeneration,through cuts in VAT on home refurbishment and renovation, Friends of the Earth revealed today. Home owners could save almost £700 each on the cost of bringing an empty property back into use.
Currently, owners of empty buildings pay VAT at 17.5%. But building new homes attracts no VAT. If the Chancellor cuts VAT on refurbishment and renovation, from 17.5% to 5%, £534 million would be slashed from the cost of bringing England's 772,300 empty homes back into productive use. The average cost per empty home would fall from £6,500 to£5,809 - a saving of £691 [1]. It would also support the Government's new housing policy,announced last week by John Prescott: “planning authorities must in future give preference to recycling previously developed sites and empty properties - brownfield first, greenfield last” [2]
The tax break would save the countryside, revitalise inner cities and create jobs.Encouraging greater use of existing buildings cuts demand for new greenfield housing and helps strengthen the economy of run-down urban areas.
Tony Bosworth, Friends of the Earth's Housing Campaigner, said:
“It's crazy that people must pay VAT on renovating empty homes but not on building new ones. Gordon Brown could save the countryside, revitalise the inner cities and give work to thousands of small builders. Getting rid of this tax will help turn the Government's brownfield housing promises into reality”.
NOTES TO EDITORS:
[1] Latest Government figures show that there are 772,300 empty homes in England. The average cost of bringing an empty home back into use is £6,500 (Commons Written Answer 27 July 1998). This means that the current cost of renovating all the empty homes in England would be £5.019 billion.If VAT on this work were cut to 7.5%, then the cost would fall to £4.592 billion, a difference of £427 million.
Figures for each region are given one page 2 of this release.
| Region | Number of empty homes | Current Cost | Cost | Difference |
| North East | 50,700 | 329.5 | 294.5 | 35.0 |
| Yorkshire & Humber | 100,200 | 651.3 | 582.0 | 69.3 |
| East Midlands | 67,700 | 440.0 | 393.2 | 46.8 |
| East Angla | 70,600 | 458.9 | 410.1 | 48.8 |
| London | 114,200 | 742.3 | 663.3 | 79.0 |
| South East | 95,000 | 617.5 | 551.8 | 65.7 |
| South West | 67,700 | 440.0 | 393.2 | 46.8 |
| West Midlands | 77,500 | 503.7 | 450.2 | 53.5 |
| North West | 128,700 | 836.5 | 747.2 | 89.0 |
| TOTAL | 772,300 | 5019.7 | 4485.8 | 533.9 |
[2] Hansard Tuesday 7th March, column 864
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Published by Friends of the Earth Trust
Last modified: Jul 2008
