After a year of deliberation, the European Commission has given its conditional approval to a scheme that will see UK stamp duty waived in disadvantaged areas
Although an exemption from stamp duty has been available for all property transfers up to £150,000 in disadvantaged areas, the Government had laid plans to abolish the duty on all transfers in such areas, subject to EU state aid approval.
After opening proceedings in February last year, the commission assessed the scheme, taking into account two key factors: the compatibility with community objectives and the effect on trading conditions.
Due to low rates of investment in deprived areas, together with the relatively low aid intensity of the scheme, the commission decided that the aid does not adversely affect trading conditions to an extent contrary to the common interest.
Herbert Smith property partner Richard Forsdyke said: "Our Brussels office has been monitoring the investigation for the benefit of several of our clients involved in regeneration projects who had tentatively discounted stamp duty in their development appraisals pending final confirmation of the decision. The announcement is welcome news for developers in some City fringe areas in Tower Ham-lets and Southwark."