A row has broken out between housebuilders and Milton Keynes council after it emerged that the £18,500 "roof tax" for the city could be as much as £50,000.

The tax, which was supposed to give housebuilders certainty about how much they will have to pay for planning gain, has risen because the initial figure did not include affordable housing.

Jane Hamilton, the Milton Keynes boss at English Partnerships, disclosed the true value of the roof tax when she gave evidence to the House of Commons' ODPM select committee at the end of last month.

She said that the present rate for the 15,000 homes in the Milton Keynes growth area was well below the cost per house.

She said: "The tariff itself is set at a level that has been quoted at £18,500 per dwelling or about £66/m2 of commercial floor space.

"What it does not include is provision for affordable housing, so affordable housing must be provided on top of any payment of tariffs, and also free land for schools, open spaces and community purposes must also be provided on top of any tariff payments.

"So the real cost is around about £35,000-40,000 a dwelling."

Housebuilders also face a further levy on top of the £40,000 roof tax to ensure that the 15,000 houses have the high sustainability standards.

Once you start getting to £45,000 that breaks the camel’s back

Housebuilder source

A meeting was held three weeks ago involving Milton Keynes council, its sustainability advisers Cyril Sweett and housebuilders to discuss the issues. It was agreed that plans to ensure that sustainability standards were above current requirements would add at least £5000, and could add as much as £9000, to the roof tax. This could lead to a total roof tax of almost £50,000 a house.

A source close to the housebuilders said that land owners in the Milton Keynes area would be put off selling land if this were the case. The source said: "This is a major issue that raises major problems late in the day. There is no way that some of the landowners will sell if such a large chunk of the land value is taken off.

"They have already said that with affordable housing it will be pushed up to £35,000. Once you start getting to £44,000-45,000 with the environmental plans, that begins to break the camel's back."

A source at Milton Keynes' planning department said the council wanted new developments to incorporate on-site renewable energy sources such as wind turbines, but added the measures were enshrined in the local plan and would not be part of the formal roof tax.

He said: "We're still working on supplementary guidance but what we're saying is that if you meet the specific EcoHomes level (which we haven't specified yet) then that will fulfil the same requirements as set out in our local plan. But it's work in kind - we're not asking for more money."

Rocketing up: The roof tax could rise from £18,500 to £50,000

Rocketing up: The roof tax could rise from £18,500 to £50,000