EU proposes 20 per cent VAT on new homes

EU proposes 20 per cent VAT on new homes

Local MEP Paul Nuttall has attacked plans to impose 20% VAT on new homes which could cripple Britain’s fragile housing market.

EU attempts to introduce the tax on new homes would have a disastrous impact on the UK’s fragile housing market and on its house building industry.

The taxation review by the EU could force the UK to scrap its zero VAT rating on all new-build homes as Brussels bureaucrats want to standardise tax rates across Europe.

"The huge increase would price people out of the market, make it even more difficult to get a mortgage and bring the building industry to its knees," said Mr Nuttall, UKIP Deputy Leader.

"I'm told that only about 130,000 homes were built across Britain last year – a historic low and plainly reduction in numbers would exacerbate the country’s housing crisis and render useless every Government initiative introduced to help increase the supply of homes."

The controversial move has already come under fire from the Residential Landlords Association (RLA) who have warned the move would “badly hit” both owner occupiers and private landlords and would cause “catastrophic damage” to the housing market in the UK .

“The EU 'one size fits all' strikes again," said Mr Nuttall. "The UK housing market has a totally different tradition to the rest of Europe as owner occupation has been the objective of most Brits whereas on the continent renting has been the norm."

“We must leave the EU and manage our own finances and resume our trade with the world,” he added.