The government has rejected property industry appeals to review charges levied by the Office of Fair Trading on straightforward property deals.
Under the present system, the OFT, which monitors company takeovers, automatically investigates transactions between companies if more than £70m of assets change hands. All companies have to pay a £10,000 OFT charge whether or not the deal is referred to the Monopolies and Mergers Commission.
The British Property Federation wrote to ministers in September following complaints from property companies. The BPF said that it was unfair for the OFT to apply rules designed to regulate company mergers to straightforward property acquisitions.
But in a letter this week, DTI junior minister Kim Howells rejected the complaint. He said: “There are no plans to alter the threshold in the assets test.”
BPF deputy director Richard Kauntze said: “The government has refused to consider the question of fairness. If there are good reasons for rejecting our request, it has not articulated it.”
The reality is this is an effective way for raising useful income so they do not want to make an exception for the property industry. They can’t justify it rationally.”
