Budget encourages low carbon homes

The latest Budget from Chancellor Gordon Brown included incentives to business and consumers to encourage low carbon housing.

During his Budget speech, the chancellor said: “Homes account for one quarter of carbon emissions. Our objective for Britain is low carbon homes benefiting the climate through lower emissions, and benefiting consumers through lower bills.”

Among the measures in the Budget, the chancellor repeated the previous commitment to exempt zero carbon homes valued up to £500,000 from stamp duty.

He also revealed he is in talks with EU ministers for a Europe-wide reduction in VAT for “energy saving and environmentally friendly projects in the home”. If talks are successful, the VAT rate for these projects would be reduced from 17.5% to 5%.

He announced that microgeneration grants, designed to encourage small-scale zero carbon energy generation by individuals of communities, will increase by 50% to £18 million. Also, pensioners who want insulation and central heating installed in their homes will be able to apply for grants of between £300 and £4000 to cover costs.

Other measures in the Budget that will affect the house building industry include an annual £8 increase in landfill tax and a rise in the aggregates levy from £1.60 to £1.95 per tonne.

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