As part of its campaign for a sustainable built environment, the UK Green Building Council (UK-GBC) has investigated a range of different incentives for creating demand for retrofit measures. The resulting report - entitled 'Boosting take-up of energy efficiency measures in domestic properties' - identifies two of the most promising options for encouraging wider uptake of energy efficiency measures as variable Stamp Duty Land Tax and variable Council Tax.
According to the report, a system of variable Stamp Duty rates would see house buyers receive a discount if a property is above a given energy efficiency standard, or pay a higher rate if its performance is poor. This is considered a strong option for incentivising retrofit because it impacts at the point of sale – a time when renovation often takes place. The analysis carried out suggests that a variable Stamp Duty based scheme could deliver up to 270,000 additional retrofits per year, whilst contributing as much as £807m a year to GDP with a near zero annual direct cost to Government.
Council Tax rates could be varied according to the energy efficiency of a property, with discounts for high performance properties and increased rates for those with poor energy efficiency. The analysis suggests that such a scheme could deliver almost one-and-a-half million additional retrofits per year, contributing well over £4.4bn a year to GDP.
Energy efficient glazing is mentioned several times in the report as a key element of retrofit packages, noting its current exclusion from the lower rate of VAT applied to the installation of some other energy saving measures.
UK-GBC calls on Government to work with industry to consider the options identified in the report and decide which can be most practically and urgently implemented.
For a copy of the UK-GBC report, please click here.