Call To Protect Older Buildings From Demolition
A loophole in VAT laws could mean that some of Scotland’s best period buildings could be destroyed rather than restored, the Chartered Institute of Building (CIB) reports. Despite the growing awareness of the environmental benefits of retrofitting and renovating buildings rather than demolishing them, the current tax rules don’t offer any incentive.
According to CIB, the standard 20% VAT applies to a restoration project, but not to a demolition and new-build project. This means that developers have no financial incentive to preserve vintage buildings, which in many cases have stood the test of time, and could be restored at moderate cost in more eco-friendly process than a full new build.
The issue is particularly vexatious in Scotland, because devolved administrations have no control over UK-wide VAT rules. There are fears that some of the architectural heritage of the nation may be lost, as well as chance to create a greener and more sustainable construction sector.
Jocelyne Fleming, CIOB policy & public affairs officer for Scotland, and author of the paper said: “We hear about the need to move away from a throw-away society and upcycle and recycle when it comes to things like clothes and furniture, and this needs to be extended to buildings too.”
She added: “It’s not only about the environment though – some wonderful Scottish buildings could also be reduced to rubble and lost forever just because it’s cheaper to knock them down than renovate them, and that would be a travesty.”
“However, at a time when businesses are often making decisions based mainly on cost, it needs to be as financially viable to restore as to demolish if we’re to improve the sustainability of construction and help Scotland reach its net zero targets.”
Some retrofitting measures, such as for energy saving improvements, have been VAT exempt since April 2022. However, the rule still does not apply to larger scale renovation projects.
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