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What is today's blog about?
In this week’s blog, we look at the Residential Property Developer Tax. Essential reading for any RICS APC or AssocRICS candidates involved in property development, particularly on the Planning & Development and Land & Resources pathways.
What is the Residential Property Developer Tax?
The new 4% tax applies to the profits of large companies who undertake residential property development in the UK.
The calculation of profits for Residential Property Developer Tax is based on the principles of Corporation Tax (under Schedule 18 of the Finance Act 1998). The new Residential Property Developer Tax will, therefore, be reported and paid on a company’s Corporation Tax return.
Why has the Residential Property Developer Tax been introduced?
The Government introduced the new tax as part of the Building Safety Package.
This will help to ‘end unsafe cladding, provide reassurance to homeowners and support confidence in the housing market’.
Therefore, the proceeds of the tax will be used to fund the cost of remediating cladding issues.
When did the Residential Property Developer Tax apply from?
1 April 2022.
The tax applies to profits from residential property development in accounting periods ending on or after this date. Apportionment will be applied if an accounting period straddled the effective date.
Who does the Residential Property Developer Tax affect?
The tax affects residential property development companies (or groups of companies) in the UK with annual profits over £25m.
Why do I need to know about this?
If you have any involvement in advising large residential property developers, then having knowledge of the tax is essential. It is also good general knowledge in relation to building safety and cladding remediation.
How can we help?
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We offer a range of short and long-term support packages in our eShop, including our popular Monthly Mentoring and Kick Start packages. These can include an RICS APC or AssocRICS Counsellor in certain circumstances.
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Stay tuned for our next blog post to help build a better you.
N.b. Nothing in this article constitutes legal, professional or financial advice.