Treasury economic secretary John Healey has moved to allay fears that encouraging people to save for retirement through residential property will damage the first-time buyer market.
Speaking at an adjournment debate on Treasury housing policy, Liberal Democrat MP Andrew George said allowing residential property to sit within a Sipp wrapper will dramatically increase the number of people owning second homes.
But Healey argued there will be no new incentive to buy property for private use because this would lead to a benefit-in-kind tax charge.
But George said the move is a backward step following the Government proposals to reduce the council tax discount from 50 per cent to 10 per cent for people owning a second home.
He said any expectation that the scheme would not be used for second homes is optimistic. He said second homes have a detrimental effect on local economies, making it difficult for businesses and first-time buyers to buy property.
Healey said: “The reforms proposed should help the supply of residential property for rent but will not exacerbate the problem of second homes.
“There will be no new incentive to purchase property for private use because any non-commercial or personal use of a property would lead to a benefit-in-kind tax charge.”