Lib Dem VAT plan 'would add £13k to new homes'
The Liberal Democrats will add up to almost £13,000 in tax on the cost of buying a new home in the West Midlands, figures reveal today.
The Liberal Democrats will add up to almost £13,000 in tax on the cost of buying a new home in the West Midlands, figures reveal today.
The party wants to get rid of the exemption from VAT on newly-built properties should it win the General Election.
The tax of between five and seven per cent would add up to £12,691 to the cost of the average £181,305 new-build in the region.
The Tories, who researched and released the data, today criticised the proposal.
New-build homes are usually cheaper than older properties.
First-time buyers are already struggling to get on to the housing ladder with mortgage lenders demanding deposits of 25 per cent.
And with house price inflation back to double figures with the cost of the average UK home now 10.5 per cent higher than it was in April 2009 at £167,802, it could become even more difficult. The number of first-time buyers has fallen by more than half in just five years, and is now at a record low.
Stourbridge developer Roy Billingham, of Billingham and Kite Ltd, who has been in the construction industry for 50 years, branded the levy a "tax on jobs" and said it would deepen the housing crisis.
"It will cost jobs - it's as simple as that," he said. "Why would people buy a new home if they can buy an older property without the VAT? Quite simply it is a tax on jobs because the housing industry is only just crawling off its knees and it will certainly not be able to stand anything like that." The 67-year-old, who is chairman of his family business, employs 20 builders and the same number of sub-contractors.
He went on: "The knock-on effect for house-building companies would be quite horrific in terms of jobs when you work it down the chain."
He questioned why the Lib Dems, who claim their green measures are the most progressive and radical of all the major parties, would want to put an extra tax on new-builds which are more eco-friendly.
The Lib Dems have said they would offset the tax on new homes by reducing VAT on the costs of rebuilding and repairing older homes.
But shadow minister for housing Grant Shapps said the move would amount to "making it more expensive to buy a new home and kicking the housing industry when it's on its knees".