Building a home in the UK could soon become significantly more expensive, as debate intensifies over a proposed overhaul of landfill tax.
Industry representatives warn the changes risk making many smaller housing developments financially unfeasible.
A leading national trade body is calling on the government to abandon the proposal before the Autumn Budget, or else it risks derailing the Government's housing targets.
Why a leading national trade body wants the proposal scrapped
The Federation of Master Builders (FMB), one of the UK’s principal national trade bodies representing small and medium-sized builders, has urged Chancellor Rachel Reeves to shelve the proposed landfill tax quarry exemption, warning it could add up to £28,000 to the cost of building a home on small sites.
FMB Chief Executive Brian Berry said the proposed changes “make no sense when the Government is struggling to meet its 1.5 million homes target.”
Berry noted that SME builders now deliver just 9% of the nation’s new homes, compared to around 40% in the late 1980s. He warned that the additional waste-related cost burden could push many small-site developments, such as self-builders who play a crucial role in local housing supply, beyond viability.
How the proposed landfill tax reform would work
Under current rules, landfill tax operates with two bands: £4.05 per tonne for inert waste materials such as soil, bricks and concrete, and £126.15 per tonne for general waste.
From April 2025, the Treasury intends to replace these with a single flat rate, arguing the change will simplify compliance, reduce misclassification and strengthen environmental incentives to divert waste away from landfill.
Builders argue this overlooks the significant volumes of heavy inert spoil produced during housebuilding, particularly on brownfield sites or former quarry sites.
The FMB now warns that the additional quarry-related measure could raise costs even further for builders working on smaller, more complex sites already grappling with rising prices and planning delays.
What builders hope to see in the Autumn Budget
Ahead of the Autumn Budget on 26 November, the FMB is calling on the Chancellor to scrap the quarry exemption proposal and reconsider the broader landfill tax reform to ensure it does not undermine national housing delivery.
The trade body is also urging the government to invest more heavily in local authority planning departments, strengthen apprenticeship support and introduce incentives to encourage small firms to hire trainees.
Berry said these steps would “help stabilise SME builders, unlock more small sites and secure the skilled workforce required to meet the country’s housing needs.”
The FMB warns that if the proposed landfill tax changes proceed unchecked, waste-management costs could become a decisive factor in determining whether new homes can be delivered - with far-reaching implications for future supply and affordability.
