Energy efficiency may be rewarded with stamp duty relief and a lower business rate

The government is considering stamp duty relief and a reduction in the business rate as ways of improving the energy efficiency of the existing building stock, it emerged this week.

The measures are expected to be recommended in a cross-departmental report looking at the ways of meeting the cost of upgrading the building stock. The Treasury, the the Department for Communities and Local Government, and the DTI are to receive it next month.

The proposals echo those made in a recent report by the Social Market Foundation. This calls on the government to introduce a “green buildings” tax relief system to encourage businesses to reduce their carbon footprints.

The proposed measures also co-incide Building’s 99% Campaign to improve the energy efficiency of our existing stock.

The report is expected to be critical of the Enhanced Capital Allowance scheme. This gives grants for a limited range of products to make an existing building more “green”.

Industry sources have said it should either be scrapped or overhauled because in its current form it is not having the desired effect of improving the stock.

The report is likely to address the issue of energy performance certificates, which would grade a building on its performance.

The government needs to be able to assess the state of the existing stock before announcing any fiscal incentives. This would help it to strike a balance between offering incentives and imposing tax penalties on poorly performing buildings.