UK – Proposals by the UK government to class real estate investment trusts (REITs) as institutional investors have been broadly welcomed by the industry.

In Wednesday's 2013 Budget, the UK Treasury said it still intended to allow REITs to class income from other REITs as earnings from its tax-exempt rental business – essentially allowing one fund to invest its capital in another – and added: "The government is further considering the case for REITs being included within the definition of 'institutional investor'."

Liz Peace, the British Property Federation's chief executive, said launching the informal consultation was "very welcome", as it had been an issue the industry was keen to see addressed.

"If the government can be persuaded to make this change," Peace said, "that will ensure the UK REIT sector can get the greatest value from the 'institutional investor' relaxation of the diverse ownership rule last year, and the 'REITs investing in REITs' rule change being made this year."

Deloitte real estate partner Phil Nicklin was also positive about the changes.

"If introduced, it will allow REITs to run their businesses more flexibly and facilitate further investment in the UK property sector, particularly through joint ventures," he said.

He also reacted positively to chancellor George Osborne's comments that the UK government recognised its tax system had "long biased debt financing over equity investment".

Osborne added at the time: "So today I am abolishing altogether stamp duty on shares traded on growth markets such as AIM.

"In parts of Europe, they're introducing a financial transaction tax. Here in Britain, we're getting rid of one."

Nicklin noted that REITs had been able to trade on the AIM since the middle of last year.

"The potential abolition of stamp duty on shares quoted on AIM and other growth markets will benefit those REITs that use those markets," he said.