Planning gain supplement could resurface in new levy

A government paper on plans for a locally collected development tax has left the door open for the reintroduction of the discredited planning gain supplement, campaigners say.

Rynd Smith, director of policy for the Royal Town Planning Institute (RTPI), said there was a “nervousness” that the bill’s references to value uplift could be used to introduce a form of PGS “by the back door”.

The government dropped plans for the PGS, a national tax on the increase in value created by the granting of a planning permission, last autumn following the almost universal opposition by the development industry.

Instead, in the Planning Bill it has proposed the community infrastructure levy, to be collected by councils to pay for infrastructure to support developments.

However, the details of the proposed community infrastructure levy, issued last week by the communities department, say that the value uplift created by planning approval should be used to help determine how much tax a developer should pay.

The Conservative party has already tabled amendments suggesting the government drop the controversial section of the bill.

“We needed the consultation to contain some acknowledgement that basing this on value uplift isn’t necessary,” Smith said.

The RTPI and other industry figures say that basing calculations upon a notional uplift in value would lead to arguments about valuations and make it unworkable. Smith says the levy’s value should be set by a local council entirely based on the cost of the necessary infrastructure.

The paper does admit lobby groups are opposed to the value uplift and says the final position is yet to be determined.