Chancellor Gordon Brown has conceded ground in his desire to introduce planning gain supplement.

As revealed in Property Week, Brown confirmed in this week’s budget that PGS implementation has been delayed until 2009 at the earliest (PW, 1.12.6). He said that the government was considering the responses to consultations and ‘if after further consideration it continues to be deemed workable and effective, PGS would be introduced no earlier than 2009’.

But he added that PGS, the tax on the uplift in value of land following planning consent, ‘would be levied at a modest rate to ensure that incentives to develop land are preserved’.

He also revealed new proposals to ensure that at least 70% of PGS would be paid directly to the local planning authority (LPA) that grants the planning permission.

Payments would be made on a regular basis. Special arrangements could be made where there exists a special purpose vehicle with planning powers such as an urban development corporations.

The remainder will also be returned to the region it was collected. The government has warned that ‘transport will be the focus of regional PGS spending in the short term’.

In London, the Mayor of London would directly receive the regional share of PGS to deliver the London Plan.

Brown said the planning system needs wide-ranging reform. In the next week, the Government will set out in a white paper its proposals to improve the speed, responsiveness and efficiency in land use planning,

Proposals include:

• setting out a new single system of planning for major infrastructure, with clear national policy statements, and decisions taken by an Independent Planning Commission.

• a significant streamlining of national planning policy, including a new framework for positive planning for economic development.

• a substantial improvement in obtaining planning permission with clearer and simpler processes and quicker handling of appeals cases.

Brown is also to modernise empty property relief from business rates. These reforms will reduce the duration of the existing empty property relief to three months for all properties and six months for industrial and warehouse properties.

Brown hopes that this will ‘enhance the supply of commercial property, reducing rents and improving access for new and existing firms…. And enhance the supply of brownfield sites for redevelopment.’

As revealed in Property Week, the budget launches a consultation on brownfield land tax incentives and proposes extending it to derelict land.

On housing, the government has unveiled new measures to encourage shared equity situations in ownership, as predicted by Property Week last week. It has also focused on Green issues in housing, saying that from 1 October 2007 all new zero-carbon homes costing up to £500,000 will pay no stamp duty.

The government wants surplus public land to provide 130,000 new homes from existing and new sites over the next decade. The Government has stated its ambitions for ensuring that the new homes tackle climate change and are constructed to high standards of sustainability.

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