In an article published by both The Conversion and Ecologist (click here to read the whole online publication), Duncan Baker-Brown explains how the current VAT status of new build houses (0%) and refurbishments (20%) rewards big developers at the expense of domestic consumers who want to upgrade the thermal efficiency of the existing housing stock.
The environmental impacts of these policies are negative; demolitions and new-builds are encouraged over renovations, leading to unnecessary waste and carbon expenditure.
By 2050 more than 85% of our housing stock will still be old homes from the 20th century. It is these homes that need the eco-refurbishments to ensure we have some hope of meeting our government’s commitment to reduce carbon dioxide emissions by 80% by 2050. These targets can only be met if central government works with home owners and the small building contractors who renovate their properties. This simply will not happen while works to these existing homes is undermined by excessive taxation.
Baker-Brown suggests that a better approach for future governments to consider would be awarding a zero-rated VAT status to any home improvements that reduce CO2 emissions.