Inner-city boost as stamp duty axed
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Your support makes all the difference.Stamp Duty is to be abolished on homes in deprived areas as part of a £1bn package of measures designed to regenerate inner-city areas.
Stamp Duty is to be abolished on homes in deprived areas as part of a £1bn package of measures designed to regenerate inner-city areas.
Gordon Brown's announcement in his pre-Budget statement on Wednesday will come as a boost to home buyers in the inner-cities, who could save thousands on transactions.
The new rules are likely to come into force in the spring when the final details of the Budget are announced. The Chancellor will tell MPs that he is prepared to "go further than the Rogers report", referring to the study carried out by Lord Rogers's inner-city task force.
Stamp duty is levied at the rate of 1 per cent on homes selling at between £60,000 and £250,000. Since the last Budget the rate has been 3 per cent for homes valued at £250,000 to £500,000, and 4 per cent for property above that level.
It was thought that the cut in stamp duty would be limited to new property on reclaimed (brownfield) inner-city sites, but government sources have indicated that the Chancellor is prepared to go beyond the report by Lord Rogers and abolish duty on all homes in so-called deprived areas.
"It will benefit home owners as well as developers and businesses in these areas," said a government source.
Areas to benefit from the move will be designated by the Government. Brownfield sites in better-off areas could be excluded. The measures will be aimed at run-down inner-city areas across Britain where the No 10 policy unit and John Prescott's Department of the Environment are keen to promote regeneration.
Tax relief for cleaning up contaminated land will be speeded up to encourage regeneration by businesses. At the moment, tax relief can be claimed by developers when sites are sold, but the concession will be available on completion of clean-up.
The aim is to reduce pressure on greenfield sites for housing, but Mr Brown has turned down the proposal by Lord Rogers for the VAT on renovation and greenfield sites to be equalised. Campaigners are likely to complain that the VAT rules still favour building on greenfield sites.
The move on stamp duty follows hard negotiating by Mr Prescott and the Chancellor. Mr Brown had been happy to cut stamp duty for developers buying property to renovate, but reluctant to extend it to the first sale after renovation or to new homes on derelict sites. Mr Brown also rejected Lord Rogers's proposal to cut VAT on building on brownfield sites as part of the drive to save rural areas from urban sprawl.
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