Bank calls for 'reduced tax' on empty homes

Posted: 03 Nov 2008 09:15:15 GMT

            Property News - Bank calls for 'reduced tax' on empty homes

The government has been called upon to reduce the amount of tax paid for renovating empty homes.

According to Halifax, there were 279,281 empty homes across England in April 2007 - nine per cent lower than the 308,438 vacant private properties in April 2003.

However the bank said that there are still too many empty homes that have been unoccupied for at least six months. It found that vacant residential properties account for three per cent or more of all housing stock in 17 local authorities.

Martin Ellis, chief economist at Halifax, suggested that an extension of the five per cent rate of VAT on renovations to all empty properties - not just those that have been un-occupied for more than two years - would help address the situation.

"It is concerning that the existence of empty homes remains a significant problem in a number of areas, particularly in the north of England," he added.

Currently, owners must pay the full 17.5 per cent VAT to renovate an empty home that has been vacant for less than two years, even if such property could provide first-time buyers with an easier way onto the housing ladder.

Recently, estate agency network Your Move called for a return of 90 and 95 per cent loan-to-value mortgages if the property market is going to recover.

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