Insurance News Archive
£111m VAT on Hips
Homeowners are set to face another tax, which will be imposed on Home Information Packs (Hips), according to a government announcement at the weekend.
Hips, which are being introduced next year by deputy prime minister John Prescott, are expected to provide detailed information to prospective buyers.
They are predicted to cost £700 to prepare but the VAT, which is set at 17.5 per cent, will push this up to £825.
For those buying detached homes, which account for around one in five sales, the cost of a Hip is expected to rise to £1,175.
In addition to this, experts are warning that mortgage firms will still insist on buyers paying for expensive valuations and structural surveys.
Hip rules will come into effect on June 1st 2007 and after this point it will be illegal for a seller to put their home on the market without a pack.
It is thought that this will reduce the number of sales that fall through and will prevent gazumping.
Experts have predicted that the VAT from the sellers' packs will earn the treasury approximately £111 million a year.
© Adfero Ltd
10 Apr 2006