Residential Property Developer Tax ' FAQs

• Published date: 07 October 2021
• Law Firm: Mills & Reeve
• Author: Ms Emily Wilkinson

What is RPDT? Residential Property Developer Tax (RPDT) is a new tax proposed to be levied against certain residential property developers on certain profits.

In late September, the government published draft legislation and initiated a technical consultation on RPDT, following on from an initial consultation in April this year. The final details of the tax are expected to be announced in the autumn Budget on 27 October 2021.

Why is the government proposing to introduce RPDT?

In the wake of the Grenfell tragedy, the government has agreed to remove unsafe cladding for leaseholders in all residential buildings 18 metres (6 storeys) and over in England. It is anticipated that RPDT will raise around '2 billion within the next decade, which the government hopes will partly cover these remediation costs (currently estimated at '15 billion).

Who will be liable to pay RPDT?

Companies will be liable to pay RPDT if they pay corporation tax.

They must also engage in residential property development activities. These are activities which meet two tests:

• They must be carried out on, or in connection with, land in the UK in which the developer has or had an interest
• They must be carried out for...