FMB 'totally opposed' to new-build VAT plans

Friday, April 23rd 2010

People planning a move to new-build properties may have to set extra finance aside to account for VAT, under Liberal Democrat policies.

The party's manifesto revealed plans for the tax and said it would charge the levy on the sale of all new homes.

As part of the scheme to equalise VAT on new-build and repair on a revenue-neutral basis, buyers of the 250,000 empty homes in the UK will receive a grant or loan for renovation.

But Brian Berry, director of external affairs at the Federation of Master Builders says: "We are totally opposed to any VAT on new-builds. That could not be happening at a worse time."

House building is at a low level already and adding an extra tax could worsen the problem.

Mr Berry added that the Liberal Democrat's plans for cutting VAT on maintenance and repairs would, however, be "a great boost".

The majority of people who struggle to get on the housing ladder are in the situation because of mortgage difficulties.

Making it easier to finance a purchase would improve liquidity and could lead to a better housing market and building industry, he added.