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Last Updated: Monday, 1 October 2007, 06:17 GMT 07:17 UK
Zero-carbon homes get tax relief
Kingspan Lighthouse
Zero carbon homes are not on the market yet
Buyers of new zero carbon homes now qualify for tax relief on stamp duty.

The government hopes the tax relief - offered during the next five years - will encourage the construction of environmentally friendly homes.

Home buyers can save up to 15,000, but the building industry warns that not many are likely to benefit soon.

A spokesman for the Homebuilders' Federation said he could not think of a single development right now that would qualify for the relief on stamp duty.

The new rules - announced in this year's Budget Report - say that buyers of new homes costing less than 500,000 will not have to pay any land tax stamp duty.

People buying more expensive zero carbon homes will get a maximum tax relief of 15,000.

Buyers of a second-hand zero carbon home will not qualify for the tax relief.

'Zero carbon' not yet defined

The government says the regulation is designed to "help kick start the market for zero-carbon homes, encourage microgeneration technologies, and raise public awareness of the benefits of living in zero-carbon homes".

It hopes that by 2016 all new homes will be built to zero carbon standard.

The move is part of the government's drive to cut back the UK's generation of greenhouse gases, which cause climate change.

However, the Treasury has yet to provide an exact definition of what actually makes a zero carbon home.

In a Budget "impact assessment" published in March, the Treasury said that a "zero-carbon home is one that does not consume fossil fuels for heat and power".

"It is highly insulated and uses renewable energy to power its needs over a year through micro generation.

"Heat and power technologies include ground source heat pumps, photovoltaic cells, solar water heaters and wind turbines."

"It will draw from the grid when the microgeneration [e.g. solar panels] is insufficient but could sell excess generation back to the grid."

The Treasury says it will have agreed a more detailed definition by the end of November.

House builders hope for a flexible definition of the term "zero carbon".

Kingspan Lighthouse
1. Wind catcher, for summer ventilation
2. Solar array at back of house for hot water and electricity
3. High-level of wall insulation
4. Biomass boiler
Design example: Kingspan Off-Site's Lighthouse

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