Plaid Cymru’s proposal to cut VAT on home renovations would spark a renaissance in the Welsh construction sector, the Federation of Master Builders (FMB) Cymru has said in response to the Party’s announcement.
Ifan Glyn, Director of FMB Cymru, said “We welcome the announcement that Plaid Cymru would press the UK Government to reduce the amount of VAT currently charged on domestic refurbishment work. The economic benefits of a VAT cut would be significant and timely, given the uncertainty facing the country as it starts the process of departing the EU. Research has demonstrated that cutting VAT on such work would provide an annual £50 million stimulus to the Welsh economy, revitalising a sector that has suffered decidedly mixed fortunes over the last decade. Far from depriving the treasury of revenue, experience from the Isle of Man suggests that the reduction could actually increase net revenues by boosting demand and cutting out the black market.”
“Moreover, it would provide a necessary shot in the arm in the effort to improve the energy efficiency of Welsh homes and help reduce our carbon emissions. Our housing stock is amongst the oldest in Europe, which is a major factor behind the generally poor levels of energy efficiency in our homes. A reduction in VAT would incentivise property owners into investing to improve the energy efficiency of their homes, thereby cutting energy bills. This could play a significant role in tackling fuel poverty, which remains a serious issue for Wales.”
“A tax stimulus could also yield further dividends in the form of empty homes being brought back into the market. There are currently 25,000 properties that are unoccupied in Wales and which could be fully inhabitable again if the incentive to renovate those homes existed. This would be equivalent to nearly two years’ worth of the supply of new homes that it is agreed Wales needs to tackle our housing crisis. Obviously, Plaid Cymru are in no position to win the General Election, but this policy highlights that a VAT reduction on home renovations is both feasible and highly desirable for the Welsh economy.”