The clause relates to stamp duty land tax for registered providers of social housing. More specifically, it relates to profit-making providers of social housing. The association of profit with social housing is not universally popular on the Government Benches. Some of the unreconstructed Government Members might seek to extend their hostility from the existence of profit-making providers to clause 80, which gives those same providers tax relief.
The Housing and Regeneration Act 2008 essentially did away with the old system of registered social landlords. It also allowed private, profit-making organisations to compete for public money. Clause 80 puts them on the same footing as non-profit-making providers, in relation to stamp duty land tax, when purchasing a property that is either already, or will become, a social home. I understand that the 2008 Act had already added references to non-profit-making providers to section 71 of the Finance Act 2003, which provided the stamp duty relief for the old RSLs. It is not entirely clear why profit-making providers were not included then. Presumably, todays proposals either represent a change of heart by the Governmentor at least an afterthoughtor correct an oversight.
A stamp duty exemption, when a project is receiving a public subsidy, seems straightforward enoughgiving it a public subsidy and tax relief at the same timebut it would be helpful to get some idea from the Minister of the amount of duty that the Exchequer will forgo as a result of this measure. In principle, however, we have no objection to the clause. Had he not introduced these proposals, the Government would in effect have introduced stamp duty on social housing developments, even if only for profit-making providers, which would have run counter to the spirit of the 2008 Act. As I understood it, that Act sought to create a level playing field for not-for-profit and profit-making providers.
Subsections (6) and (7) appear to merely extend the related relief for clients of the old RSLs to those of the new profit-making organisations. A social tenant who enters into shared ownership of their property will now receive the same favourable stamp duty treatment irrespective of whether the social housing provider is a profit-making or a not-for-profit body. We find no reason, therefore, to oppose the clause, but I shall watch with interest to see whether the Government Members are of the same view.
On the subject of unreconstruction, it is just as well that there is not a European dimension to clause 80. Had there been, we might have heard from a few more Conservative Members.
The hon. Member for Hammersmith and Fulham has correctly described what the clause does and what its purpose is, arising from the change in the Housing and Regeneration Act 2008. He asked why the change was not made in that Act, but of course this is a change that can only be made in a Finance Act. That is why it is here in front of us today. It ensures that the relief, currently available for certain acquisitions by registered social landlords and for purchases under shared ownership schemes operated by housing associations, can be extended under the new system of registered providers of social housing in England to those who may be profit-making companies, who can operate a shared ownership scheme and be eligible for a social housing grant. What this does is extend to them the benefit of SDLT relief.
Bodies that become profit-making registered providers of social housing will mainly be developers building homes for sale under low cost home ownership schemes currently attracting grant aid under section 27 of the Housing Act 1996. Acquisitions with grant aid under that section do not currently attract SDLT relief, so in this case the measure will increase the amount of relief given. As relief under the measure is tied to the receipt of public subsidy, it is unlikely that there will be a net increase in the volume of shared ownership purchases qualifying for SDLT relief. That is the basis for saying that the cost of the measure is negligible.