listed buildings unfairly treated in spring budget

One significant issue brought into play by the Spring Budget was the change to VAT treatment of protected (listed) buildings.

Alterations to listed buildings will now be applicable for 20% VAT whereas previously they have always been free from VAT, as opposed to maintenance and repairs that attract the full rate. This has encouraged the rescue of countless listed buildings over the decades, the future of which, has now been put into jeopardy. 

Prospective buyers will now have to seriously consider whether the substantial additional costs of refurbishing a listed building, together with the vastly increased influence of conservation bodies and the effect they have on construction costs, are worth the investment.

The new 7% stamp duty rate and the 20% VAT increase will seriously impact on a clients budget, and the most likely area he will look to save money will be on any construction work (i.e the conservation and preservation of the listed building/our countries heritage). The future potential value of the property will also be considered when planning substantial alterations and these huge additional taxes will reduce the scope of any construction/preservation works.

Mid-market house sales in the £2M to £4M bracket could literally stall in light of the 7% stamp duty rate. The few buyers willing to bear this burden may well look to unlisted buildings that can be demolished and replaced with a new dwelling at zero VAT. Proposed simplification of the planning laws may help to facilitate this. The demand, therefore, of listed homes at this value will fall, particularly if substantial renovations are required.

Companies such as ours have heavily invested in fast disappearing craft skills for decades in order that our built heritage may be preserved. Was this for nothing?