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Ministers have denied that a forthcoming tax on property developments — an alternative to the proposed Planning Gain Supplement — will end the careers of many in the trade.
Accountancy firm PKF this week remarked that changes to the Government's new Community Infrastructure Levy (CIL) — announced in early August — 'could be the final nail in the coffin for many developers and... is almost certain to place an additional burden on an industry that is already suffering from the adverse affects of the credit crunch'.
The Department of Communities and Local Government (DCLG) refuted the claim, saying PKF had 'failed to appreciate' that the CIL will make matters 'more straightforward' and offer 'greater certainty' to developers. They currently have to go through lengthy, complex s106 agreements, individually negotiated for each project, said the department.
The claim by PKF (which called the CIL 'a vast improvement on what was previously being envisaged under the Planning Gain Supplement') that developers will still be subject to s106 agreements for infrastructure are also untrue, added the DCLG. Such documents will be scaled back to only continue for affordable housing.
PKF also voiced concerns that the level of CIL is likely to be inconsistent throughout the UK, because planning authorities will not be obliged to demand the levy.
The DCLG responded by saying that councils being able to choose whether or not to charge CIL from next spring will help prevent the possibility of projects being rendered unviable.
