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What next for tax increment financing?
Published: 2010-06-08 15:09:37
Efforts to introduce tax increment finance (TIF) won't necessarily be halted by the new government's economic plans, according to British Property Federation (BPF) finance and investment director Peter Cosmetatos.
Alongside Core Cities and other influencers, the British Property Federation has been lobbying for the adoption of TIF in the UK.
Cosmetatos is aware that deficit reduction is one of the Coalition Government's criteria for making policy. But he is also encouraged by the fact that enterprise and growth are also high on the list.
"I don't think that TIF will necessarily fall foul of the economic agenda if the investment falls on the private sector," he said. "There are currently schemes that could be done on that basis."
One of the key considerations for the Government is that TIF should not appear on the public sector balance sheet.
"BPF will be actively lobbying the Government with budgetary submissions," Cosmetatos said. "Along with Core Cities, we will continue to make the case for TIF."
Cosmetatos also expected more powers to be devolved under the Coalition's favoured localisation agenda, along with deep cuts in public funding.
There are other changes that are likely to have an impact on regeneration and development: restructuring of capital allowances and restructuring of tax relief on interest paid.
"But we don't know the details yet, although they say they want to create a level playing field," he said. His concern is that any reduction in the level of corporation tax may not compensate for any changes in the operation of capital allowances and tax relief.
"The mood among our membership is mixed," said Cosmetatos. "Those who are London focused are quite bullish. But in other areas members believe that it is a more difficult market. Up to a year ago, there was a much more consistent view across the country."
Peter Cosmetatos is a member of the SocInvest 2010 panel discussing the implications of government policy for regeneration.