The Royal Institute of British Architects (RIBA) has responded to the news from the Budget Statement that VAT on Permitted alterations to listed buildings will change from the current zero rate to the standard 20%. There has long been an anomaly in that repairing such buildings carried the 20% liability, but alterations did not. But in order to justify the retention of a building it is sometimes necessary to find a new use for it and convert it, and the sudden jump from zero will almost certainly have a detrimental effect on the number of projects that are undertaken.
RIBA Conservation Group Chair Robert Franklin said:
'There is a real concern from the RIBA that the planned increase from zero to twenty percent VAT for alterations to listed buildings could have a debilitating economic impact on development in the historic environment. Whilst VAT may discourage some inappropriate proposals, I fear a 20% rate, so suddenly applied, will make it unaffordable for listed building owners to make necessary alterations to many of our cherished buildings, whether for correcting past mistakes or bringing up to date for new uses. The economics of such schemes may increase the number of buildings 'at-risk', through pressure to demolish and replace with new-build, particularly for housing which remains zero rated.
Due to the speed of the proposed VAT change we are particularly concerned that those schemes deemed viable based on the zero rate may suddenly become non-viable, and not go ahead.'
The RIBA will now work alongside our national stakeholders in order to make a full assessment of the impact of the proposed changes and will be responding to the government consultation in due course.