HBOS calls for VAT cut on empty properties

Date: 3rd November 2008

The high street lender HBOS has called for a reduction in VAT rates for all properties empty for more than six months.

Currently, the cost of restoring an empty home attracts the full rate of 17.5 per cent VAT, unless the property has been vacant for more than two years.

With the number of unoccupied homes in the UK standing at almost 280,000, the bank believes that it is vital the discounted rate is extended to all empty properties.

Martin Ellis, chief economist at the group, said: "It is concerning that the existence of empty homes remains a significant problem in a number of areas.

"We would like the government to extend the five per cent rate of VAT for renovating an empty home to all properties vacant for more than six months."

Last month, the British Property Federation labelled corporate rates on empty commercial properties as "bombsite Britain tax".