Tax proposals could damage investment in housing
The British Property Federation (BPF) has warned that proposals unveiled in chancellor of the exchequer George Osborne's Budget last year are very damaging to UK housing.
Speaking to the House of Lords Finance Bill Sub-Committee yesterday (January 28th), the BPF singled out measures that are intended to ensure 'the fair taxation of residential property' - such as the 15 per cent stamp duty rate.
As a result of this, it may be less likely for people to consider making an and investing in housing in the country.
Indeed, HiFX recently told the Evening Standard that people who own a foreign property are already more seriously affected by currency fluctuations than those who do not.
The BPF asserted that the Budget measures were merely a knee-jerk response to media reports of stamp duty avoidance by wealthy foreigners.
As a result, it told the House of Lords committee that the plans were thrown together without adequate consultation and will not have a significant impact on business.
Director of policy at the BPF Peter Cosmetatos said that two more significant changes that his organisation would recommend are the abandonment of the capital gains tax proposals and early implementation of the proposed exemptions from the scope of the 15 per cent rate - which is already in force.
He also said that the decision to implement this measure in the first place was "inexplicable" - and that it would have been bad enough to unsettle ordinary taxpaying businesses and to alarm actual and prospective inbound investors with ill-planned legislation anyway.
"While some of the damage has been remedied and bona fide businesses are generally unaffected by the stamp duty changes, it is very difficult to see how capital gains tax proposals can be redeemed," the expert commented: adding: "This most ill-conceived and complex element of the package will create incentives that run wholly counter to their declared policy aim."