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Housing industry calls for return of conservatory tax

By Katie Anderson on January 21, 2013

Chancellor of the Exchequer George Osborne has been encouraged to restore a tax on large-scale home improvements that was dropped in December.

The so-called conservatory tax was established to compel homeowners to ensure that major home improvements, such as building an extension or conservatory, met minimum green standards. The Coalition had hoped that the tax would improve the energy efficiency of Britain’s draughty housing stock, but Conservative MPs effectively vetoed the measure.

Allegedly described as “bonkers” by the Prime Minister, the tax was swiftly kicked into touch, but leaders in the housing industry are now calling on the chancellor to restore the tax as a matter of priority.

According to an eleven-strong group of building trade associations in the UK, which include the House Builders Federation and the Royal Institution of Chartered Surveyors, Britain’s housing stock is among the least energy efficient in Europe. The group has urged Mr Osborne to consider imposing the tax on homeowners in a bid to ensure that energy-efficiency standards improve across the country.

Urging a government that appears obsessed with deregulation to restore the conservatory tax may be a futile endeavour, but Mr Osborne is hardly likely to reject an opportunity to collect yet more tax from the British public.

The Chief Executive of UK Green Building Council, Paul King, noted: “There’s been a lot of noise about stripping away regulation, [but] this is about redressing the balance. Not all regulation is bad for businesses and sometimes companies want the clarity and certainty that good regulation presents”.

Can the conservatory tax be classed as “good regulation”? Mr Osborne must weigh several factors before considering a move to restore the tax. During times of austerity, homeowners perhaps ought to face fewer restrictions on property development. The UK is, however, required by law to reduce its carbon emissions, which means improving the energy efficiency of domestic properties. This can be achieved by installing loft insulation, cavity wall insulation and new central heating boilers.

Ensuring that large-scale home improvements meet minimum standards of energy efficiency might not be disastrous for homeowners, so Mr Osborne can be expected to review the conservatory tax in the coming weeks.