The Planning Bill changes remove mention of developer contributions on land whose "value increases due to permission for development". Instead, the CIL would look at a development's economic viability. The House of Lords was set to debate the amendments as Planning went to press.
Shadow planning minister Jacqui Lait said: "Conservatives, the industry and the professions have pressed for all references that could be taken as a tax on land values to be deleted from the bill. We want a simple right for local authorities to negotiate a levy that will compensate communities for developments' impact."
British Property Federation chief executive Liz Peace commented: "We welcome the government's desire to listen to our concerns and ensure that the CIL delivers the necessary support for our communities without deterring development."
Meanwhile, London Councils has called for a cap on the level of cash that mayor Boris Johnson can take from the levy. Otherwise, it claimed, communities will risk losing regeneration and transport funding.
Executive member for planning Chris Roberts said: "The proposed levy could lead to developers pulling out of much-needed regeneration schemes and community projects because of the expense of paying both the council and the mayor."