VAT on new houses

What\’s this Lib Dem thing? VAT on new houses?

What?

Sure, there should be equality between VAT on new housing and restoring old but that would be best done by reducing VAT on restoration. Reducing here meaning \”eliminating\”.

For increasing the tax on the sale and or purchase of housing will reduce the liqudity of the market. And we know that reducing the liquidity of the housing market increases unemployment. (Yes, it does: high rates of home ownership increase unemployment because ownership is less liquid than private sector rentals. Council housing of course increases unemployment even more as council housing is even less liquid than ownership.)

One possibility is that they can\’t reduce VAT on restorations because the EU says that we can\’t. But then that\’s just another good reason for leaving, isn\’t it?

5 comments on “VAT on new houses

  1. If they want to impose VAT on new homes, that hardly squares with a goal of more affordable housing, surely.

  2. “Sure, there should be equality between VAT on new housing and restoring old but that would be best done by reducing VAT on restoration.”

    Restoration from derelict is VAT free.

  3. Johnathan, “affordable” housing just means “subsidised by other people”; the actual cost is irrelevant.

  4. Pingback: Do you think the cost of housing in San Diego will ever get down to a reasonable price?

  5. In a free market the massive VAT subsidy, that currently exists for the housing market, only serves to boost the value of land banks. This speculative economy actually acts as a dis-incentive to house building, in tern, raising the value of the property market.
    As well as incentivising the destruction of old buildings, the subsidy also creates a huge disparity between agricultural land prices and land deemed suitable for housing. A discomfort felt across the countryside.
    Implementing a pre-planned, phased rise in VAT on housing would provide a massive short term incentive to build housing, helpful in the current economic downturn and a long term view for the industry, unencumbered by high land values.
    Taking a good chuck of the deficit with it.

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