Proposals from a government-backed urban taskforce to introduce tax measures to stop greenfield development and promote an ‘urban renaissance’ in Britain’s towns and cities could be dead in the water after being labelled ‘topsy-turvy thinking’ by tax experts.
The taskforce, led by Lord Rogers of Riverside, was appointed to help solve the problems associated with house building in the countryside.
It is considering using taxation to dissuade building on greenfield sites while making urban areas more attractive to developers.
‘This is a proposal fraught with difficulty. The definition of a greenfield site will not be easy. Withdrawal of tax relief on existing homes in the country will be resisted by taxpayers as a discriminatory and retrospective taxation,’ said Chartered Institute of Taxation council member Anne Redston.
Financial measures under examination include tax breaks for building on disused urban land; scrapping mortgage interest tax relief for greenfield-site homes and putting the cash back into towns; ‘impact fees’ on developments; using health and education budgets for urban regeneration; penalties for land kept vacant; and reducing VAT on refurbishments.
‘If the withdrawal of relief applies only to new greenfield sites, it would mean that building in the countryside will become a precondition for urban renewal,’ Redston added.
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