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NEW TAX COULD ADD “ENORMOUS” COSTS TO DEVELOPERS, WARNS KING STURGE

Developers and landowners in the South West have been alerted to expect a new tax this year that could cost them “enormous sums.”

 

International property consultants King Sturge say there could be major implications from legislation designed to raise money for improving infrastructure.

 

Although details are not yet known, there are forecasts that it could add up to £18,500 per house to residential developments and result in an extra £1 million tax bill for a 150,000 sq ft warehouse.

 

Andrew Penna, planning partner at the Bristol office of King Sturge, said a Bill published two months ago paved the way for the Community Infrastructure Levy, previously referred to as a statutory planning charge.

 

The idea is to introduce a new levy that would be triggered by the increase in value of sites when they receive planning permission.

 

The new tax would be in addition to the existing Section 106 agreements under which developers agree as part of a planning agreement to pay for community improvements in areas affected by their proposals.

 

The draft bill does not contain details, leaving it to be provided by new regulations that will come out during 2008.

 

“However, it is anticipated that this levy will have to be paid by all but the smallest developments and will be spent not only locally, but also regionally and nationally,” said Mr Penna.

 

Figures being mentioned stem from an infrastructure tariff already launched elsewhere in the country.

 

“If the levy adopted similar figures, the costs would be enormous. This is something to watch carefully in 2008,” he said.

 

There is also concern that the Government has failed to deliver promised reforms that would simplify and speed up the planning process.

 

Experts at King Sturge, who have reviewed developments in the planning system, said there was always doubt about the wisdom of trying a new approach instead of improving the existing situation.

 

New Local Development Plans were at the centre of the changes but King Sturge say not a single local authority had yet got all the necessary documents in place.

 

 

ENDS             21st February 2008

 

For further information please contact Neil Fraser, Sturgess Van Damme, on 01275 349011 or email neil@sturgessvandamme.co.uk

 

 Notes to editors

 

King Sturge is one of the largest international property consultancies in Europe (52 offices in 17 countries), with a comprehensive network of over 165 wholly owned and associated offices throughout the world.  Over 3,800 staff throughout these offices cover all property sectors and specialisms, including plant and machinery.  In Europe, King Sturge operates in principal mainland European cities.

 

In Asia Pacific, King Sturge has associations in Australia, Indonesia, Malaysia, New Zealand and Singapore.

In North America, King Sturge has business partners in the Americas and Canada through King Sturge CORFAC International.