Residential Property Developer Tax

HMT have published a consultation paper (closing on 22 July) on the design, implementation and administration of a new tax, the Residential Property Developer Tax (RDPT). RPDT will apply to companies that undertake UK residential property development activities on profits that exceed an annual allowance of £25 million. The new tax will apply to profits from accounting periods ending on or after 1 April 2022. The legislation will be included in the 2021–22 Finance Bill. The rate will be set following the consultation on design. The consultation states that RPDT is time-limited and intended to raise at least £2bn over a decade. The revenue raised will contribute to cladding remediation work as part of the government’s plan ‘to bring an end to unsafe cladding, provide reassurance to homeowners and support confidence in the housing market.’ (Background is here)

A new Gateway 2 Levy will also be introduced as part of the Building Safety Bill applying to developers seeking permission to develop certain high-rise buildings (above 18 metres) in England. This will be the subject of a separate MHCLG consultation although the interaction of the tax and the levy, and their cumulative impact, is considered in this consultation.  

Please send any comments to [email protected] by 22 June 2021.