The Liberal Democratic Party's housing and land research panel adopted Friday a proposal to change the gift tax scheme to benefit home buyers and promote housing demand as part of the party's measures to fight deflation.

Under the proposal, the nontaxable limit for a financial gift will be raised from the current 5.5 million yen to 30 million yen when it is provided to help acquire homes, as a five-year temporary step.

The panel said the increase in the nontaxable amount would be an incentive for parents of potential home buyers to give them money to help them buy homes, thus spurring housing demand and boosting the economy.

Chief Cabinet Secretary Yasuo Fukuda said Friday the government will consider adopting the proposal as part of its own measures to battle deflation that are to be released Wednesday.

The LDP panel said the projected change in the gift tax scheme would have economic effects worth 2.1 trillion yen.

Although it would reduce revenues from the gift tax by 18 billion yen, it would increase consumption tax income by 55 billion yen, in line with an expected rise in housing starts.

Free money

Minister of Economy, Trade and Industry Takeo Hiranuma announced measures Friday to help financially troubled small and midsize businesses.

The measures include allowing companies eligible for the government's "safety net" lending scheme to borrow up to 30 million yen without collateral from Shoko Chukin Bank, as well as relaxing eligibility conditions for government-sponsored loans and loan guarantees, and allowing delays in repaying the loans.

The measures will be included in Prime Minister Junichiro Koizumi's comprehensive "antideflation" package, to be compiled by the end of this month.

Small and midsize companies suffering from the effects of the mad cow disease scare and the collapse of large companies and financial institutions with which they had business ties, will, in principle, be given leniency in the repayment of state-guaranteed loans.

The government has already accepted 120,000 cases of relaxed loan repayment terms since its special guarantees on 1.72 million loans, worth 29 trillion yen, ended in March, the minister said.