Carbon emissions from homes are as much of a blow to the environment as stamp duty is to a homebuyer's bank account. But, in his 11th budget speech delivered to the House of Commons today, Gordon Brown said in six months time, they will start to cancel each other out.
The Chancellor announced that from 1 October 2007 all new carbon-zero homes costing up to £500,000 will be totally exempt from stamp duty. Homes costing over £500,000 will receive a flat reduction on their stamp duty bill of £15,000.
The move – that was widely anticipated by the industry - is part of a wider green campaign of incentives for people to reduce carbon emissions from housing which, according to Communities and Local Government, make up 17% of total emissions in the UK.
But the government definition of 'carbon-zero' (i.e zero net emissions of CO2 from all energy use in the home) is "very challenging" to achieve say green experts - even for a new home - while on an existing one it's near to impossible.
For existing homes, the Chancellor has made other provisions such as tax breaks for certain alterations that older people make to their homes.
Mr Brown confirmed he would slash VAT payable on such home improvements from its current 17.5% down to 5% - the lowest rate available under EU VAT agreements. The changes will take effect on July this year, following discussions between the Chancellor and representative groups.
Mr Brown also said he would be in increasing the funds available through the DTIs (Department of Trade and Industry) Low Carbon Buildings Programme - a supplier of grants to homeowners wanting to make green improvements. He will be raising the total funds to over £18m in an attempt to meet growing demand.
Away from British shores, Mr Brown has earmarked £800million for the Environmental Transformation Fund. This finances overseas development projects that deliver poverty reduction and environmental benefits throughout developing countries.
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