PRESS RELEASE
Issued by:
Councillor Alan Taylor
Date of Issue: Nov 9th 2005
Contact numbers:
0151 334 1135

PENSIONS PLANS THREAT TO WIRRAL FIRST TIME BUYERS
'Whole generation in danger of being priced off the housing ladder'

A Liberal Democrat Councillor has today issued a warning that a new pensions tax break could price young Wirral homebuyers out of the housing market and is calling on the Government to give first time buyers the same tax breaks.

Councillor Alan Taylor, Housing Spokesperson for the Liberal Democrats on Wirral Council said,

“As if things weren't bad enough for first time buyers, they'll now be facing even more competition from people buying second homes through Self Invested Personal Pensions (SIPPs)”

SIPPs are do-it-yourself pension funds where taxpayers make their own investment decisions. Under controversial rule changes for SIPPs, due next April, high-earners will be able to cash in on an effective 40 per cent “discount” on second homes.

“In other words,” said Councillor Taylor, “a £100,000 property will cost the higher-rate taxpayer £60,000; the other £40,000 will be in the form of relief.”

Hundreds of thousands of well-off people are expected to exploit the new tax perk.

Councillor Taylor said.

“We're in the middle of an affordable housing crisis, with a whole generation in danger of being priced off the housing ladder. Now is not the time to be giving tax breaks to second home owners.

“The SIPPs tax breaks could open the door to a wave of investment in second homes, pricing young families here in Wirral out of the market.”

“Properties at the lower end of the market, which were once the first rung of the housing ladder for young people, are likely to be snapped up, sending prices up even higher.”

“I'm calling on the Government to give first time buyers the same tax breaks as those investing in property as part a Self-Invested Personal Pension.”

ENDS