First time home buyer news: Tax threat to affordable homes

22-May-2006

Affordable homes in the UK are expected to be jeopardised by a government proposal to tax property development, according to latest research.

The Royal Institution of Chartered Surveyors (Rics) and the British Property Federation (BPF) claim that the new measures will have a negative impact on first time homebuyers.

Under the proposed Planning Gain Supplement (PGS), revenue from uplift in land value is collected by the state and used to pay for housing where it is most needed.

However, it is thought that lack of political consensus means that landowners will hold back on developments in the hope that the next government will overturn the tax.

It is also believed that it will impose a tax on business expansion and take the means of delivering development priorities away from local government.

"The affordability crisis facing many people today can only be improved by increasing the supply of housing," comments Louis Armstrong, chief executive of Rics.

The Association of Chartered Certified (ACCA) also believes that PGS will do little to boost the UK's housing supply and may even raise housing costs.

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