Last week, HM Treasury published draft legislation and guidance for consultation on the proposed new residential property developer tax, to be charged on profits of companies carrying out residential property development.
The tax will apply to companies that undertake residential property development activities, including seeking planning permission in relation to it, constructing it, managing it or marketing it, and will fall within the charge to corporation tax. The rate of tax will be calculated at the applicable rate on the profits made on the residential property development activities, although the threshold is currently unknown. There will be some exemptions to the tax, for example, if the homes are to be used as sheltered accommodation or for student accommodation.
The consultation ends on 15 October 2021 with the aim that the draft legislation will form part of the 2022 Finance Bill. The tax aims to raise £2bn, although the draft legislation makes mention of an end date to this new tax. It is expected that the final details of the tax, including tax rates, will be announced at the Autumn Budget on 27 October 2021.
The government is seeking your views on the draft legislation of the Residential Property Developer Tax ahead of its inclusion in the 2021-22 Finance Bill.