Friday, 20 April 2012

So taxes on development mean less development? No surprise there then!


The "Community Infrastructure Levy" (CIL) is a hypothecated tax on development. The intention is to get funds for all those good things like schools, parks and bus stops that are 'provided' by government. And, like all taxes on business it's a cost - in this case specific to each individual development.

It seems that Council's have been setting the rates for this tax too high:

Stephen Teagle, managing director of affordable housing and regeneration at Galliford Try, said the company had done work earlier this year comparing the historic cost of providing 35 per cent affordable housing on a development with the cost of providing it on top on CIL payments. ‘We found there’s a significant gap between the historic cost and new CIL payments councils are asking for. Something has to give, and what will give is the delivery of affordable housing,’ he said.

Indeed some Councils are setting the levy at approaching three times the rate at which affordable housing can be afforded in a development. The result of this is that developers - if planners insist on affordable housing at current percentages - simply won't develop. Instead they'll bank the permission and wait until market conditions look at little better.


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