Real Estate Blog: Residential Property Developer Tax and RP exemption
On 8 October 2021, the government published revised draft legislation on the residential property developer tax (RPDT), which is to apply from 1 April 2022.
An exemption from RPDT has quite rightly been introduced for non-profit housing companies, which are defined as non-profit registered providers of social housing and their wholly owned subsidiaries.
RPs do however need to be aware that an exit charge will apply to companies that cease to be a qualifying body if they do not distribute their assets to another qualifying body within a year (or such later time agreed by HMRC).
This will be a welcome relief for RPs as it will exempt all their development activities, including the construction of houses for private sale where the profits are used to fund the development of further affordable housing.
Developers who are not qualifying bodies should note that that they will not benefit from the exemption in relation to any affordable housing that they build.
There will be more blogs to follow on this topic.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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