Wednesday, August 02, 2006

The Odd Couple

The Campaign to Protect Rural England and the National Housing Federation have got together in what even they are describing as a surprising and unexpected alliance to call for action on rural housing affordablity. I can't really see what's so surprising about it. Rural house prices have been a growing issue for years and these two orgainisations have got a direct interest.
One of the items on their campaign agenda is Better use of existing buildings "affordable housing supply could be increased through a targeted programme to reduce empty property in rural areas, reducing VAT on refurbishment work from 17.5% to the 5% level applied to new build." The new build level is actually 0% not 5% at the moment, but I agree with the principle. The problem with VAT on building works is not how much it is set at but the differential rates. If you want to create a home and are faced with a VAT on building costs at 0% or VAT at 17.5% your decision is likely to be swayed. It's artificialifical skewing of the market in favour of new build.

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