The British Property Federation has raised calls for action from the government to ensure the build-to-rent industry is not included in a new tax to raise £2bn for cladding remediation.
The Residential Property Developer Tax will tax developer profits to finance cladding remediation on old buildings. However, the industry has been calling for institutionally backed BTR and PBSA, which does not generate profit through sales, to be excluded from the tax.
The BPF previously joined forces with others in the industry to rally against the inclusion of the BTR industry in the tax, which has been branded “unfair and nonsensical”.
Industry leaders Grainger, Quintain and Greystar all joined the consultation, stressing that the tax was not appropriate for their models models and could stymie growth of the industry.
In a statement, the BPF said it had made clear to the government that “it would be disproportionate to bring build-to-rent within this new tax’s scope” when the sector is fully liable for remediation work and does not pass costs on to renters. It said taxing the sector would “unfair”.
Ian Fletcher, director of real estate policy at the BPF said: “We welcome the exclusion of the purpose-built student accommodation sector from the new residential property developer tax. This will support new investment into modern and high-quality homes for students, and the higher education sector’s recovery and ambitions for growth.
“Policy decisions regarding the build-to-rent sector’s inclusion in this new tax have not yet been finalised – and we continue to argue for its exemption. The build-to-rent sector has not contributed to the building safety problems and the attributed financial disputes between freeholders and leaseholders, which this residential property developer tax is intended to fund.”
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