Residential property developer tax legislation
UPDATE 27 October 2021: Rishi Sunak MP confirmed in his Budget statement that the residential property developer tax will commence in 2022 and will apply to developers with profits over £25m at a rate of 4%.
The new residential property developer tax (RPDT) that was included in the 2022 Finance Bill was published on 20 September 2021 by HM Treasury and announced at the Autumn budget on 27 October.
The final version of the tax announced at the Autumn 2021 Budget will introduce a new 4% tax which will be payable from 1 April 2022 and will apply to companies or groups of companies undertaking UK residential property development with annual profits in excess of £25 million.
Background
On 29 April 2021, HM Treasury published a consultation paper detailing its proposal for the design, implementation, and administration of a new residential property developer tax (RPDT), payable on profits over a £25,000 annual allowance from April 2022.
On 10 February 2021, the Housing Secretary announced a five-point plan to restore homeowner confidence and rehabilitate unsafe cladding on high-rise residential buildings, including a £5 billion package with at least £2 billion funded by a new tax payable by large residential property developers.
Technical consultation
HM Treasury published, on 20 September 2021, a policy paper containing draft legislation, and an accompanying explanatory note, for RPDT. The deadline for comments on the draft legislation, which is to be included in the 2022 Finance Bill, was 15 October 2021.
The government unveiled the final RPDT (including the tax rate) at the Autumn 2021 Budget.
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This is not legal advice; it is intended to provide information of general interest about current legal issues.
