Property Developers Face New ‘Cladding Tax’ in 2022
Author: Elin Ludgate (ACA)
Are there any new taxes I need to be aware of as a residential property developer in 2022? The answer is yes. There is a new residential property developer tax (RPDT), announced in this Autumn Budget (2021), which will come into effect from April 2022.
It’s a 4% tax on profits over a £25 million threshold will apply for the 2022/23 tax year to UK companies involved in residential property development. This is unlikely to affect small and medium size property developers though.
The revenue from the Residential Property Development Tax (RPDT) will be used to support £5 billion the UK Government is investing to remove unsafe cladding from buildings at risk of fires.
The Treasury has said that the tax is going ahead to ensure the largest developers make a fair contribution to help pay for building safety remediation. Between the 2022/23 and 2026/27 tax years, the Treasury estimates the RPDT to raise around £1.125bn. The RPDT will be collected from a company’s corporation tax return.
If you need help with your corporation tax this coming year or for advice with property tax, please don’t hesitate to contact our team, let’s talk.