BPF tells Osborne to reform housing in Budget
Published by Max Salsbury for 24dash.com in Central Government and also in Development, Finance, Housing
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The British Property Federation (BPF) has urged George Osborne to use this week’s Budget to boost the housing market.
With housing starts in 2012 plunging 11 percent to below 100,000, and research revealing the government’s tax on empty properties is draining more than £1 billion a year from business, the BPF believes the Chancellor should help kick start an economic recovery by:
• extending the relief from empty rates to allow businesses to bring vacant shops, offices and factories back in to use;
• moving away from the RPI related business rates increase towards an increase based on the two per cent inflation target, or the CPI measure of inflation;
• changing the rules to allow direct institutional investment in the space above shops for conversion into flats to help breathe life into high streets;
• clarifying rules governing when a residential portfolio is compatible with the REIT rules.
The BPF believes the majority of the changes would be tax neutral and taken together could provide much needed impetus to the house building and retail industries.
Liz Peace, chief executive of the BPF, said: “The Chancellor clearly has a weak hand from which to play, but housebuilding is a proven way of getting some movement into the economy both in the short and long term, and the industry is one of the few that can make inroads into youth unemployment.
“The business rates regime clearly needs addressing. Why should the tax system exaggerate the existing cost base and flexibility advantages of an internet retailer over a high street retailer? Particularly given the urgent importance of encouraging investment on the ground in the built environment and UK jobs.
“Additionally empty rates are draining more than £1bn a year from those holding unproductive property – money that could be saved to support jobs or re-invested to bring these properties back into use.”