The chancellor has called on the housing sector to help devise a workable development tax after the Barker Report's recommendation of a shake-up of the planning system.
It was one of several Barker proposals immediately accepted by Gordon Brown in his 2004 Budget on Wednesday afternoon.

The issue of taxing increases in land value gained by the granting of planning permission is likely to put the government and the affordable housing sector at loggerheads with housebuilders who say the charge will deter development.

Economist Kate Barker's Treasury-sponsored report urged the government to impose a percentage levy on the increase in value of land gained with planning permission. Planning gain agreements would still be used to provide affordable housing and cover the "direct impact of development". The charge would be set by central government but councils would get to keep a proportion of the charge.

Brown said in his budget speech: "It must be in the interests of the whole country to see whether we can forge a shared approach."

But Gideon Amos, director of the Town and Country Planning Association, said: "I foresee a pitched battle. The development industry will not want to pay this."

Alan Cherry, chair of Countryside Properties, said: "How many more times do we want to learn the lesson that this doesn't work?

"It will reduce the delivery of land and take resources away from investing in the stuff that makes communities sustainable."

Other Barker proposals accepted by Brown included the merger of regional planning bodies with regional housing boards to integrate planning more tightly with housing.

These merged bodies would be supported by newly created independent regional planning executives, which would be responsible for identifying growth areas and providing advice on setting housing numbers.

Barker's report also proposed the construction of a £100m-200m community infrastructure fund to fund the upfront cost of utilities and transport infrastructure for new developments.

Source

Housing Today