The BPF has urged the Government to introduce targeted tax measures to encourage investment in new green technology and town centre regeneration projects
The BPF has called for the government to introduce targeted tax measures to incentivise innovation and environmentally friendly development in response to a consultation on the reform of capital allowances.
The BPF also proposes introducing a new tax credit system, similar to that which applies to Research and Development spending.
Buildings are responsible for around 30% of all greenhouse gas emissions in the UK. In order for the government to reach its targets of net-zero by 2050, significant capital investment in new types of building, building techniques and new technologies to improve the energy efficiency of existing buildings will be required.
A pressing need for investment in town centres if the Government is to fulfil its levelling up missions by 2030
The BPF has suggested that the Government introduces targeted relief for capital expenditure on town centre regeneration projects that:
(a) replace environmentally inefficient plant and machinery e.g., heating, and cooling systems in existing buildings
(b) sustainably retrofit or repurpose existing buildings
(c) help to regenerate the high street
This would help drive the greening of new and existing buildings, if the Government were to introduce a new tax allowance for capital spending on decarbonisation and town centre regeneration, accompanied – critically in the eyes of the BPF – by a cash tax credit that companies can claim where they have no taxable profits, as is often the case during a development or refurbishment.
“Time for a radical change to the capital allowances rules”
Ion Fletcher, director of policy, British Property Federation, comments, “Meeting net-zero and levelling up aspirations will require a huge investment in the built environment by the property sector working in partnership with Government. The sooner this investment is made, the better for all of us. It is time for a radical change to the capital allowances rules to help accelerate spending on decarbonisation and town centre regeneration”.
