RICS says developers will be "choked" twice under Gordon Brown's current planning tax proposals.
The RICS has called on the Chancellor to adopt a tariff-based alternative to the Planning Gain Supplement, which is expected to be announced in today's budget.
In an open letter to Gordon Brown, the surveyors' body said that the PGS proposals as they stand could choke new projects as developers would be taxed twice, under the PGS and then under a section 106 agreement.
It warned that protracted negotiations between developers and officials over the value of projects could slow progress and cause a loss of transparency in what benefits a community would gain from developments.
The RICS also claimed that local authorities may be tempted to release more greenfield land for development to raise revenue, rather than follow current policy to support brownfield projects.
The open letter, from RICS chief executive Louis Armstrong, went on to demand that the Government address the "anomaly" between 0% VAT rates on new build and the 17.5% rate on refurbishment.
It argued that the difference in rates acted as a "perverse incentive that rewards demolition and re-construction of property rather than refurbishment of existing developments".
Armstrong also urged Brown to revamp his proposals for the Real Estate Investment Trust (REIT), which he said was less attractive than REIT vehicles in other countries in its present form.
