BUDGET 2016: Tax deductibility proposals will hit real estate hard

16 Mar 2016

Policy area: Tax & Finance

Melanie Leech, chief executive of the British Property Federation, comments on the Government’s decision to take forward the OECD’s recommendation to restrict the tax deductibility of interest to between 10%-30% of earnings: “As a capital-intensive industry, real estate is going to be really badly hit by these proposals. Today’s announcement is particularly frustrating as it the sector is not even the target of these proposals.
“We are concerned at the quick implementation of this, and are worried that there will not be enough time for Government to fully understand the implications of this policy. It is really important that the Government works to provide appropriate rules for the industry, as it could lead to millions of pounds less investment in real estate and infrastructure, which in turn means the loss of thousands of jobs. We will be working closely with the Treasury over the coming weeks and months to see how we can make these proposals more amenable to the real estate sector.”