Tax is outdated making refurbishing old buildings to reduce emissions and the delivery of better quality construction too expensive

The Converstaion logo

Full article in The Conversation, 25 Oct 2019 by Walter Menteth

Abstract:

The construction of new buildings in the UK emits 48 megatonnes of CO₂ each year – equavalent to Scotland’s entire net emissions. The materials, transportation and construction processes for new buildings are all carbon intensive. Existing buildings already embody significant CO₂ emissions which makes it all the more important to upgrade and refurbish – rather than demolish and rebuild – wherever possible. But as it stands, the UK’s tax system actually puts a significant financial penalty on refurbishment, while incentivising new construction.

Construction VAT rates for all dwellings should be simplified: with all new or existing building works charged at 5% rate, as experts have long called for. It is also proposed that the existing 0% VAT rate for new dwellings be redefined, so that developers can only obtain financial rewards if they use low-carbon construction techniques certified on completion to deliver qualitative change and create highly energy efficient buildings.

This could accelerate reductions in CO₂ emissions and improve the quality of outputs while creating long-term economic benefits by reducing demands on energy supply and materials consumption – all of which could be done quite simply.

The article here describes how.