Buyers face higher stamp duty for purchasing non-green homes

Buyers of properties with the worst energy efficiency ratings, such as old, large houses, would incur nearly a three percentage point surcharge – the same chunk that is added on for the purchase of additional homes. 

A large detached house built in the 1900s with an EPC rating of D that sold for £2m would cost its buyer 2.7 percentage points extra in stamp duty. This would add £53,903 to the tax bill, bringing it to a total of £207,653.

Mr Adams said the measures would make buyers aware of the disadvantages of lower-graded properties by creating a clear price differential. “Right now people simply do not understand the implications of what they are buying, they may be taking on a significant liability,” he said. 

He said another benefit was that the proposals would encourage existing homeowners as well as buyers to improve the energy efficiency of their houses to avoid seeing the value of their property fall when they come to sell. 

As part of its target for all homes to have an EPC rating of C by 2035, the Government is exploring giving lenders a deadline of 2030 to have an average C rating across all their entire portfolios. This would make it harder and more expensive for a potential buyer to secure a mortgage for a home with a low energy efficiency rating. 

The stamp duty proposals would use the Energy Performance Certificate rating system, but Mr Adams has called for this to be reformed so that it reflects energy efficiency rather than fuel costs.

A Government spokesman said: “We believe everybody deserves to live in a decent and safe home, and our reforms will deliver a fairer system for all, supporting homeowners and landlords to improve their home energy performance, cut energy bills and increase consumer choice. 

“Huge progress is already being made to the energy efficiency of UK homes, and we are investing almost £6.6bn to support people to install energy efficiency measures across the UK.”

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