Warnings issued over ''development tax'' ? commercial mortgages

11 January 2008

Property industry experts have warned that the government''s proposed development tax has its fault, according to reports.

A meeting with representatives of the British Property Federation (BPF) and the Home Builders Federation (HBF) revealed that members thought the Community Infrastructure Levy (CIL) was too close to the Planning Gain Supplement.

They urged the government to alter the clauses in the Bill which link the tax with land value because this would cause valuation problems associated with planning gain supplements and also cause problems for the commercial mortgages market.

In a joint statement released by the HBF and the BPF before the parliamentary evidence session, the groups said: "Industry leaders stressed that the starting point for CIL must be a local assessment of the infrastructure required to support planned development with consideration to what charge is appropriate and viable in that area."

They added: "Such proposals would undermine the workability and clarity of the CIL approach."