The BPF’s new director general Liz Peace has said that the government’s planned stamp duty exemptions for property in disadvantaged areas could discourage commercial investment in housing.
A recent Inland Revenue consultation paper proposed the separation of commercial and residential property in order to exclude expensive houses from further stamp duty exemptions.
The government plans to raise stamp duty exemptions on non-residential property in designated disadvantaged areas above £150,000 to encourage regeneration and investment. However, residential property worth more than £150,000 will not be exempt.
But Peace argued that the separation of commercial and residential would damage the private-rented sector because it would make it “difficult to convince institutional investors of the value of investing in residential property in these areas”.
She added: “It will also raise serious doubts as to whether the government is truly committed to encouraging the development of a higher quality private-rented sector.”
Peace fears that the separation of commercial and residential property is too simplistic. “A better definition would be to distinguish between ‘domestic transactions for owner occupation’ and ‘commercial investment transactions’,” she said.
EGi News 07/03/02
