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Government drops development tax

Regeneration & Renewal, 12 October 2007

Proposals for a tax on the increase in land values gained upon receipt of planning permission have been shelved and replaced with a tariff-based approach.

Chancellor Alistair Darling this week announced he would shelve the Planning Gain Supplement and introduce standardised tariffs across council areas in a forthcoming planning reform bill.

The announcement brings to an end years of debate over how to charge developers for planning gain. Documents released alongside the pre-Budget report say that income from new tariffs will be used to fund vital infrastructure, including that of regional or sub-regional importance.

The PGS however "will therefore not be introduced in the next parliamentary session", a government document said.

- See Editorial, p19.