Catalyst has responded to HM Treasury’s consultation on the introduction of a new Residential Property Development Tax, intended to raise £2 billion over 10 years to pay for the remediation of faulty cladding that has been banned following the Grenfell Tower disaster.
We recognise the recommendations made in the Grenfell Inquiry and that there is an ongoing issue across the sector with building safety and that it will be a costly and long process to resolve. Catalyst’s utmost priority is the safety and wellbeing of our customers, and we are wholly committed to doing what’s right and acting quickly to resolve and remediate any issue that might impact building safety in our customers’ homes.
However, not-for-profit housing associations like Catalyst represent a key resource for the country to deliver enough affordable homes for those in need of them. We believe the proposals, as currently outlined, could have a detrimental impact on our ability to meet the government’s expectations on the provision of affordable housing.
All ‘profit’ in a not-for-profit housing association must ultimately be reinvested in affordable homes for it to retain its not-for-profit status. Therefore any move to tax ‘profits’ reduces our ability to meet our social purpose and build more affordable housing.
Our view is that exemption from the proposed tax and Gateway 2 Levy should be extended to include not only charities, but also not-for-profit registered providers of social housing and their wholly owned subsidiaries.