CIOB is calling for urgent action to reduce the number of buildings that are demolished, instead of refurbished, to meet net-zero targets.
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The CIOB is calling for VAT reform in Ireland, and the introduction of a demolition levy in Northern Ireland to address this issue.
The institute said its proposals would not only address urgent carbon and climate issues but help preserve historic buildings and also generate funding for energy-efficient upgrades to housing. This would help vulnerable households cope with the cost-of-living crisis.
Joseph Kilroy, CIOB policy and public affairs manager for Ireland, Northern Ireland, Scotland and Wales, said: “We hear about the need to move away from a throw-away society and upcycle and recycle when it comes to things like clothes and furniture, and this needs to be extended to buildings too.
“At a time when so many decisions are cost-based, it’s wrong that carbon-intensive options can be more financially beneficial than more sustainable options.
“With the construction and operating of buildings accounting for large proportions of Ireland and Northern Ireland’s carbon emissions, incentivising refurbishment and renovation needs to be a priority for both governments in order to reach net zero by 2050.”
VAT reform
In Ireland, CIOB proposes the government incentivise repair and restoration. Currently 13.5% VAT is applied to demolition projects. CIOB would like to see this rate given to repair and renovation projects, and for demolition to be charged at the standard VAT rate of 23%.
CIOB says the current situation contradicts environmental principles laid out in the Circular Economy and Miscellaneous Provisions Act 2022, the Climate Action and Low Carbon Development (Amendment) Act 2021, and the EU Taxonomy Regulation 2020 – an EU-wide classification system for sustainable activities.
Demolition levy
In Northern Ireland, renovation and retrofitting costs are subject to the standard 20% VAT. But demolition and new build is not. CIOB says this again contradicts environmental principles such as those contained in the Climate Change Act (NI) 2022, and the 2022 Circular Economy Strategy for Northern Ireland.
When the NI assembly returns, it wants to see the Northern Ireland government bring in a demolition levy that bypasses the current devolution settlement around tax. CIOB says this will level the unequal playing field that threatens the sustainability of the built environment.
