On 8 October 2021, the government updated the draft legislation for the residential property developer tax (RPDT), which is to apply from 1 April 2022, to include an exemption for non-profit housing companies.
An exemption from RPDT has been introduced for non-profit housing companies (NPHCs), which are defined as non-profit registered providers of social housing; registered social landlords under Part 1 of the Housing Act 1996 or Part 2 of the Housing (Scotland) Act 2010; registered housing associations under Chapter 2 of Part 2 of the Housing (Northern Ireland) Order 1992 (SI 1992/1725); and their wholly owned subsidiaries.
There are provisions for an exit charge to be payable in certain circumstances where an NHPC ceases to be one.
Registered Providers will welcome the new exemption, which will exempt all of their development activities, including the construction of houses for private sale where the profits are used to fund the development of further affordable housing. Conversely, developers that do not fall within the definition of NPHCs will not benefit from the exemption in relation to any affordable housing that they build.
How can Tozers help?
Our Affordable Housing team have over 25 years’ experience in this sector, forming close working relationships with their housing clients. To find out more about the areas they advise on and their bespoke services please visit their hub page or contact a member of the team.