Property companies and house-building leaders last night wanted the government not to repeat its mistakes of the proposed development tax.
Industry experts told a parliamentary committee that the wording of the proposed Planning Bill links the proposed Community Infrastructure Levy (CIL) too closely with Planning Gain Supplement (PGS).
Representatives from the British Property Federation and the Home Builders Federations urged the government to change clauses in the bill linking the tax with land value.
In the parliamentary evidence sessions, which gives industry figures the chance to give evidence on incoming legislation and call for changes, they said the references to land value would cause ‘the same significant valuation problems associated with PGS.’
PGS was proposed as a way of funding community infrastructure by taxing the increase in land value through development.
CIL has been praised by the industry compared with PGS, which was collected by central government, because it will be collected and distributed locally – strengthening the relationships between the local authority, the community and the developer.
But Andrew Whitaker the HBF’s head of planning, also called for ‘pragmatism’ when setting the amount of levy to be paid so as not to put too much pressure on profit margins.
‘If we set it too high it will stifle development – we are paying a large amount of money under section 106 already.’
John Rhodes, director of planning consultancy RPS, also called for CIL to be integrated with Local Development Frameworks which would ensure the levy is spent as it is intended.
‘It is the only sensible way in which the property industry can be confident the money is being spent on infrastructure,’ he said.
Talking to Property Week Knight Frank’s head of planning Jeremy Edge, who has also worked with the BPF and HBF on their response to the Planning Bill, said the government will need to be flexible in relation to the levy if it is going to work alongside other government aims.
‘I think there will be an increasing debate on that – particularly continue to experience the current change in the property market,' he said. ‘What this will need is greater flexibility and a greater knowledge of how development works.’