Home buyers to pay the price for energy guzzling properties

Home buyers could be forced to pay a higher rate of Stamp Duty if they buy a home with a poor Energy Assessment.

The proposal would be introduced alongside the Government’s £90bn Green Deal scheme in 2012, by which householders will be offered ‘free’ green makeovers by energy companies, local councils or DIY chains.

The UK has to meet legally binding targets to cut greenhouse gas emissions by 34% of their 1990 levels within ten years.

The Stamp Duty proposal comes from the Green Investment Bank Commission, an advisory body set up by the Labour government last year.

The report says: “Ultimately, either implementing penalty rates of Stamp Duty for houses purchased where the buyer does not implement available energy efficiency measures, or setting minimum standards on properties, will be required.”

One idea being considered by the Department of Energy and Climate Change is that people who buy a property with low levels of insulation and a dated boiler would have to pay an extra 0.5% levy on top of the normal Stamp Duty.

If they improve the energy efficiency within a year, they would get the money back as a tax rebate.

To avoid paying the higher Stamp Duty, a home would need to be upgraded to at least band E on an EPC.

However, the proposals have met with heated opposition, with critics complaining that it is a stealth tax and that improving the energy efficiency of properties should not be part of the sales process.

John O’Connell, deputy research director of the TaxPayers’ Alliance, said: “Just when the housing market is starting to pick up, it would be madness to throw in a punitive tax like this that could put people off buying altogether.

“Requiring expensive upgrades to people’s homes now, when so many people are struggling just to get on and stay on the property ladder, is particularly awful timing.

“The idea should be thrown in the recycling bin immediately.”

But Marc Blomfield, managing director of The National EPC Company, said the Stamp Duty change would incentivise sellers to make improvements, in order to make their properties more saleable.

He said: “Despite scrapping HIPs, the Government has signalled its intention to increase household energy efficiency by retaining the EPC as a required marketing tool.

“The Government is committed to reducing carbon dioxide emissions and sees households as the major target.”

This may be a good time to start planning for the future. You may even qualify for some grants.

Why not have an Energy Assessment carried out by one of our accredited Energy Assessors?