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Government plans home improvement tax, claim Tories

8th January 2007 | back to article listings BACK    print this article PRINT

The Conservative party claim that there is "irrefutable evidence" that government is to implement a new "home improvement tax" by stealth.

The tax would see properties revaluated on an annual basis and, taking into consideration any material changes such as the building of sheds, patios, double glazing, bathrooms, conservatories and extensions, homeowners could be billed accordingly through their council tax payments.

Buy-to-let investors, who often purchase cheap homes before doing them up to let to tenants, would be significantly affected by the alleged proposals as letters, already stretched by spiralling energy prices would be able to afford to pay less in rent.

Being rolled out as a pilot in April in Northern Ireland, where prices jumped 53 per cent in the last 12 months according to Halifax, the plans will mean that any changes one makes to their property are liable to be taxed in the following tax year.

Although many governments have favoured an annual revaluation of homes, only recently has the technology become available and easy to put into practice to do so.

Sir Michael Lyons, who is currently chairing an inquiry into the workings of local government, is said to support the plans. The Conservatives say that in unreported comments, Mr Lyons insisted that "there is everything to be said for" revaluating homes on an annual basis as "the technology is at hand" to do so.

The Tories claim that this is effectively a tax on house price inflation.

"There is now irrefutable evidence that the Labour government is preparing to introduce a new home improvement tax, on top of stamp duty, and a new levy on house prices in every part of the United Kingdom," said Caroline Spelman, shadow secretary of state for Local Government and Communities.

"Even those who rent and aren't on the property ladder will also be hit."

She continued: "Taxing home improvements, including sheds, double glazing and conservatories, is an overt Labour tax grab on family homes, punishing those who have worked hard and saved.

"Yet I am very concerned that tax inspectors have been given the invasive power and tools to barge inside and inspect your home, and log and record every feature - including the number of bedrooms and bathrooms."

Should the taxes come into force across the country, it would add pressure to homebuyers' finances who already pay stamp duty of one per cent over houses costing £125,000, three per cent over £250,000 and four per cent over £400,000.

A Halifax survey released last week showed that the average home in Greater London is now worth £287,176, over £2,000 above the inheritance tax threshold.

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