Recommendation 18

HM Government Acknowledged

We are already considering an exemption from the levy for affordable housing as a whole, which includes social housing, housing for rent or sale at least 20% below market rent or sale rates, shared ownership, and rent to buy. This is because the Government recognises that applying a levy to affordable housing would increase the cost of developing affordable housing and is therefore likely to disincentivise supply. We will consult on the levy; possible exemptions will be considered as part of that consultation and a final decision will be made once it is complete and responses have been analysed. Where residential property is developed by a non-profit registered provider of social housing or its subsidiaries, this will be out of scope of the Residential Property Developer Tax, which is based on profits. Social housing providers that are freeholders/landlords will be required to meet all non-cladding remediation costs where they are – or have links to – the developer, or where costs exceed the leaseholder cap. It is not our default expectation that they will have to fund in-scope remediation works from their own resources; we want them to be able to pursue those responsible for defective work. That is why we are bringing forward an ambitious toolkit of measures to allow those responsible for defective work to be pursued, including a cause of action relating to product manufacturers and the provisions enabling associated companies to be sued.