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Planning Gain Supplement U-Turn?
Although most of the headlines were grabbed with Mr Brown’s consideration of disbanding the previously approved super-casino in Manchester, developers up and down the country will be more interested in another bill discussed. Included in the draft bills was the Planning Gain Supplement Bill. Mr Brown took his first steps yesterday to begin to play down the previous proposals considered by the government over the last two years. Following consultation on the Bill, it is hoped that an alternative proposal which would be more acceptable to developers could be implemented. As has been discussed at length before, Mr Brown is currently faced with an ever increasing problem of housing shortage. If he hopes to remedy this problem, he must make sure that developers continue to develop and are not discouraged from building more homes to ease the burden. Planning Gain Supplement, as originally anticipated, would have introduced a tax on the landowner once planning permission was obtained for the development of their land. The amount of tax would be based upon the increase in the value of the land following the obtaining of planning permission. It is believed that this tax would either be passed onto developers or absorbed by the landowner. The former would increase budgets and cause possible cash-flow issues for the developers. If the tax was to be absorbed by the landowner, it would possibly mean they would be unlikely to part with their land until such time as the tax was abolished. The Conservatives have been a long time opposer to Planning Gain Supplement, therefore it is possible a landowner would not have to wait very long. Although under the new Planning Gain Supplement Bill the above form of tax has not been ruled out, the shift in government policy appears to have made it an unlikely prospect. Mr Brown stated yesterday that the Bill introducing the new tax was “provisional”. He further went on to say “If prior to the pre-Budget report a better way is identified of ensuring local communities receive significantly more of the benefit of planning gain to invest in necessary infrastructure including transport - and it is demonstrated that these are a better alternative - the government will be prepared to defer next session’s legislation”. Many experts have proffered their ideas for an improved form of tax including developers paying a roof tax per building, regardless of size or value of the development. This idea is currently being trialled in Milton Keynes. With such a large opposition to the new tax, it always appeared likely that Mr Brown would come up against a backlash if it was introduced. However, having taken matters into his own hands and with the appearance that he is willing to listen to the experts, Mr Brown has an opportunity to score high points with landowners and developers alike. On a cautionary note, before landowners and developers breath a collective sigh of relief, it should be remembered that this Bill is still in its infancy and the matter still has a long way to run. There is no certainty regarding the final result. |
