The Chartered Institute of Building (CIOB) has added its voice to the growing clamour to incentivise repair, refurbishment and refit by proposing an increase in VAT on demolition projects in Ireland and Northern Ireland.

Under Ireland’s current tax structure, a reduced rate of 13.5 percent VAT is applied to demolition projects; taxation parity with the repair and restoration sectors.

CIOB says this contradicts the principles outlined 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. 
 
The organisation is proposing the Government use the tax system to incentivise repair and restoration over demolition, reducing the embodied carbon footprint of Ireland’s built environment. It is calling for demolition to be charged at the standard rate of 23 percent VAT, while repair and renovation activities remain at the reduced rate of 13.5 percent.

According to the CIOB, the built environment accounts for 37 percent of Ireland’s carbon emissions and 49 percent in the UK with heating, cooling, and lighting buildings, known as operational carbon, being responsible for the majority with the remainder attributable to embodied carbon; emissions resulting from mining, quarrying, transporting, and manufacturing of building materials, in addition to construction activities, the repair, renovation and final disposal of buildings.

CIOB Policy and Public Affairs Manager Joseph Kilroy says: “Charging full VAT for demolition in Ireland while maintaining the reduced rate for repair and refurbishment and introducing a levy for demolition in Northern Ireland would create tax environments that reflect the principles of existing climate legislation and the urgency of the national net zero by 2050 targets.”

Although the proposals are aimed specifically at Ireland and Northern Ireland, the CIOB statement is clearly eyeing the wider UK built environment.

The statement says: “Currently, in the UK, renovation and retrofitting costs are subject to the standard 20 percent VAT, but demolition and new build is not, often making it more financially attractive to raze buildings to the ground than restore them, despite restoration usually being the more sustainable option. The UK’s lack of VAT on demolition makes it an outlier compared with most other nations. ”

Campaigners fighting to save a Birmingham city centre landmark have turned to the law in a bid to save it from demolition. The Save Smallbrook group has appointed a senior barrister to challenge the decision to knock down the historic Ringway Centre.

The group has appointed climate and heritage barrister Estelle Dehon KC to challenge the council’s decision. Depending on the outcome of her initial work, the group will then be crowdfunding to develop the campaign.

As we reported this time last year, the original proposals that were approved by Birmingham City Council involved demolishing the Ringway Centre in three phases, replacing it with three new buildings, the tallest of which would be 56 storeys.

Although the Ringway Centre is listed locally as a Grade B heritage asset, the plans would ensure the entire building is demolished – little over six decades since its completion.

Campaigners say this approach is based on both a misunderstanding of the centre’s quality and of environmental considerations – particularly in light of Birmingham’s net zero targets ¬¬– because of the amount of embodied carbon that would be lost by pulling down the building as well as the construction phase.

As an interesting wrinkle to the tale, DemolitionNews understands that the Ringway was once the headquarters of the Midlands and Wales Region of the National Federation of Demolition Contractors under secretary George Bacon, an office it shared with the Federation of Civil Engineering Contractors that collapsed in 1996.