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UK Tax Breaks for Zero Carbon Homes
In hopes of helping to kick-start a market of zero-carbon homes, encourage microgeneration technologies, and raise public awareness of the benefits of living in zero-carbon homes, the British government announced last week a significant tax break for the original buyers of the eco-friendly homes. Known as the “stamp” tax, homebuyers (and sellers) pay a percentage fee to the government at the point of sale. The new tax break could save buyers as much as £15,000 (nearly US$28,000).
Homes valued at less than £500,000 (nearly US$1,000,000), will have the tax waived altogether, but it does not affect the second sale of the home. In conjunction with the Carbon Challenge (a campaign by the Department of Communities and Local Government to accelerate the housing industry’s response to climate change), which launched this February, the tax break has helped trigger a race for developers to build the first zero-carbon homes — whose definition and technology are still being worked out.
According to the British government, zero-carbon emission homes do not consume fossil fuels for heat and power. They ideally feature wind catchers for summer ventilation, solar arrays at the back of the house for hot water and electricity, a high-level of wall insulation, and a biomass boiler.
By using renewable energy to power its needs throughout the year via microgeneration, the houses are expected to draw from the electricity grid only when microgeneration (e.g., solar panels) is insufficient. But homeowners are able to sell excess energy back to the grid. Although developers are hoping for a more flexible definition of “zero carbon,” the British government has promised to provide a more detailed interpretation by November. It is still yet to be seen how gas and water utilities will react to the plan, especially given the official goal to have all new homes built for a zero-carbon standard by 2016.
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