Insurance News Archive
Land tax may stifle affordable homes market
Affordable homes in the UK may be jeopardised by a new government proposal to tax property development, according to latest reports.
A survey by the Royal Institution of Chartered Surveyors (Rics) and the British Property Federation (BPF) reveals that first-time buyers may be those worst hit by the tax.
It is claimed the intention behind the Planning Gain Supplement (PGS) is that revenue from uplift in land value will be collected by the state and used to pay for infrastructure.
However, lack of political consensus means that landowners are holding back on developments in the hope that the next government will overturn the tax.
"Due to the long-term nature of the planning cycle, landowners can afford to sit on land until it is most advantageous to develop it," comments Rics chief executive, Louis Armstrong.
"PGS is a disincentive to bringing land forward for development and the timing couldn't be worse," he added.
Last week the proposals came under scrutiny by the Office of the Deputy Prime Minister select committee.
© Adfero Ltd
08 May 2006