Charging Council Tax on unbuilt developments could decrease house building numbers by deterring SME house builders, warns the Federation of Master Builders (FMB) in response to proposals made by the Local Government Association.

Brian Berry, chief executive of the FMB, said: “The imposition of Council Tax on unbuilt homes could increase the risks of bringing forward new developments by small house builders. The measure could deliver the opposite of what it hopes to achieve by reducing the number of smaller housing developments.

“SMEs already face serious challenges in terms of access to finance and scarcity of small sites. For small house builders to be liable for Council Tax on properties which can’t be built would add yet another layer of risk and act as a further deterrent to smaller developers. It is already commonplace for local authorities to start charging council tax on homes that are incomplete – sometimes before even the basics, such as plastering, have been finished. It seems there’s now a danger of Council Tax being charged if you do build and also charged if you can’t build. That can’t be right.”