Budget - 'Greenest' let off stamp duty

Carbon emissions from homes are as much of a blow to the environment as stamp duty is to a homebuyer's bank account. But, in his 11th budget speech delivered to the House of Commons today, Gordon Brown said in six months time, they will start to cancel each other out.

The Chancellor announced that from 1 October 2007 all new carbon-zero homes costing up to £500,000 will be totally exempt from stamp duty. Homes costing over £500,000 will receive a flat reduction on their stamp duty bill of £15,000.

The move - that was widely anticipated by the industry - is part of a wider green campaign of incentives for people to reduce carbon emissions from housing which, according to Communities and Local Government, make up 27% of total emissions in the UK.

But achieving the government's definition of carbon-zero ('zero net emissions of CO2 from all energy use in the home') is 'very challenging' even on new homes, say green experts, while on existing ones it's near to impossible. Julian Brook is an eco-home assessor and director of Greenmoves, a website that lists eco-friendly property for sale. He said: "It's a start but could only apply to new homes anyway. To give you an idea, the total stamp duty saved might pay for 50 per cent of what you would need to do to an existing home to achieve this carbon-zero state and thats not even taking planning issues, for solar panels etc, into account."

The Chancellor also said he would be liaising with mortgage providers to see how they could package up further incentives in the form of green home loans, already offered by some lenders including Norwich & Peterborough and Ecology building societies. The Co-operative Bank, that has made contributions to an organisation combating climate change for each mortgage on its books for the past 7 years, says it is in full support of the announcement.

The bank's chief executive, David Anderson said: "We plan to extend our current green mortgage proposition by developing an innovative solution to reward and encourage homeowners to actively reduce their CO2 emissions. We are convinced that green mortgages will become the most common form of home loan in the future."

From 1 June this year, all homes will be required by law to have an Energy Performance Certificate prior to being marketed for sale. The EPC will be carried out by one of the country's newly-qualified Domestic Energy Assessors. The certificate, which represents the first document in a Home Information Pack (HIP), will rank a property on a scale of A to G in terms of its energy efficiency and make recommendation on how the score can be improved.

21 March 2007 © Moneyextra.com

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