The Government has released further details of the “Residential Property Developer Tax” (RPDT), which aims to fund the remediation costs of replacing dangerous cladding on leasehold properties.
The Tax will be levied on the profits of companies carrying out residential property development. The Tax applies to profits arising in accounting periods ending on or after 1 April 2022.
The announcement follows a consultation on the policy design, which ran between 29 April and 22 July 2021. One hundred thirty written responses have been submitted. A further technical consultation on the draft legislation will run until 15 October 2021 to ensure the legislation operates as intended.
Views are invited to be submitted to RPDT.firstname.lastname@example.org.
The announcement does not reveal the percentage of Tax on profits the RPDT will levy, with this is to be confirmed in the Autumn Budget on 27 October.
Alongside the Building Safety Bill, which is making its way through Parliament, the Tax is part of the Government’s response to the inaction of developers to create safe buildings which are considered to be at risk of the sort of disaster at Grenfell Tower.
Estimates around the cost of cladding remediation vary with figures from £5bn to £15bn.