Following Gordon Brown’s announcement that the government wants to look at alternatives to the planning gain supplement (PGS), the green paper lists four options.
- A lower-rate PGS coupled with higher section 106 obligations. Under this option, while all PGS revenue would be returned to the region it was raised in, the government would rethink proposals to hand back 70% to the relevant local authority
- The PGS to be levied only on greenfield sites, which see the biggest rise in values
- Replace the existing system of individually negotiated section 106 agreements with a standard planning charge – in effect a Milton Keynes-style “roof tax”
- Legislation to introduce a standard planning charge. This would be similar to the previous option, but by placing the charge on a firmer legislative footing, it would be possible to apply it to a wider spectrum of small-scale developments.
The government will announce whether it is proceeding with the PGS in the autumn when the pre-Budget report is published.