The government must offer more tax breaks for its US-style property investment funds if it wants them to fund regeneration and social housing, the Treasury has been told.

Derek Joseph, managing director of housing consultant Hacas Chapman Hendy, said: 鈥淚f we鈥檙e going to achieve investment in anything other than upmarket housing through PIFs, then the government needs to propose some further tax breaks.鈥�

He made this point to the Treasury during a consultation on PIFs that ends today.

He said the proposals laid out by chancellor Gordon Brown in the Budget in March would do very little to increase the supply of affordable or key-worker housing.

The British Property Federation, which compiled a 120-page response to the consultation, suggested that returns to private investors in regeneration schemes or affordable housing be made tax-free to encourage investment.

Ian Fletcher, commercial and residential director at the BPF, said: 鈥淚t is viable to use PIFs to finance the building of houses to be rented at market rates, but not at social or intermediate rents under these proposals.鈥�

PIFs, the British version of US real estate investment trusts, are designed to make it more attractive to invest in property and were suggested to the chancellor by economist Kate Barker. They give tax breaks to property trusts resulting in increased dividends.

Source

Housing Today