CIF's VAT plan to target old building regeneration
AROUND THE BLOCK:AS BUDGET DAY looms the Construction Industry Federation (CIF) is calling on the Government to address what it sees as something of an anomaly which is deterring legitimate building firms from investing in old properties for renovation.
With so little activity in the building industry at the moment the CIF maintains one of the few opportunities is in the area of buying, refurbishing and selling on old housing units.
However, it says that in many urban areas, protected structures, many of which are residential units (sometimes in Georgian areas), can’t be purchased for renovation and resale because the VAT treatment on the subsequent sale (post-refurbishment) will wipe out any profit on the project.
The CIF is calling for a VAT input credit to be applied on the purchase price of a newly refurbished property that will incentivise legitimate operators to become more active in this space, rather than leaving the activity open to black market operators.
Granted, a positive response to the CIF’s plan from the number crunchers in Government Buildings will hardly trigger a building industry revival, but there’s probably a case to be made to incentivise the refurbishment of valuable historic properties by reputable operators.