Clause 72 - Alternative property finance: land sold to financial institution and leased to individual

Finance Bill – in a Public Bill Committee at 3:00 pm on 10th June 2003.

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Question proposed, That the clause stand part of the Bill.

Photo of Mark Prisk Mark Prisk Shadow Paymaster General

We welcome the overdue recognition in the Budget and the Bill of the distinct position of those of the Islamic faith who need mortgages, and we are happy to support the Government in their aim. Having abolished subsale relief earlier, they are now having to target relief. Will the Chief Secretary confirm that the arrangements are applicable to the non-residential market as well, because they are particularly important for small businesses?

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

Stamp duty land tax allows for fairer tax treatment of property purchases by individuals financed by certain types of alternative mortgage products. Purchasing a property with an Islamic mortgage currently results in a higher stamp duty charge than when using a conventional mortgage. The modernised regime removes that anomaly, putting the stamp duty treatment of purchases financed in that way on a level footing with purchases financed by conventional mortgage products. The benefits are not restricted to the Islamic community, because the Government believe that many other consumers may benefit from increased choice in the mortgage market. The reliefs do not exclude all commercial transactions. Transactions made by individuals or a group of individuals, including partnerships when all the partners are individuals, can make use of the reliefs, and whether the property being purchased is residential or commercial is not a factor in the availability of those reliefs.

Question put and agreed to.

Clause 72 ordered to stand part of the Bill.

Clauses 73 and 74 ordered to stand part of the Bill.