Chancellor of the Exchequer Gordon Brown has signalled that stamp duty on commercial schemes in designated deprived areas could be abolished in the next Budget.
In a speech on manufacturing to the TGWU today, Brown said: “In the pre-Budget report, I implemented the first stage of stamp duty relief in 2,000 of our high-unemployment areas – the abolition of stamp duty on all home and business property transactions up to £150,000.
“I intend to significantly increase or abolish this limit altogether for commercial transactions in this area.”
The Chancellor has faced difficulty pushing through plans to scrap stamp duty in disadvantaged areas, because under EU competition rules the plans are regarded as state aid. But Brown is facing pressure to introduce the reforms to boost the regeneration of run-down inner city areas.
However, the RICS and BPF have expressed doubts about the plans.
The BPF’s new director general Liz Peace recently claimed that a separation of residential and commercial schemes could dissuade investors from putting money into large residential projects in disadvantaged areas.
The Government is also expected in the Budget to close some of the loopholes involving stamp duty on property deals. Treasury estimates show that the government lost out on £160m of duty in central London alone last year as a result of avoidance schemes.
Stamp duty has increased fourfold since Labour came to power in 1997, and many in the property industry have accused the Chancellor of seeing them as a soft target for “stealth taxes”.
EGi News 28/03/02
