Planning Gain Supplement ''outlined''

Chancellor Gordon Brown is expected to outline a new tax called the Planning Gain Supplement when he reveals his new budget tomorrow.

Also know as the roof tax or development land tax, this proposal originates from the Barker report out earlier this year which said a new tax should be imposed so that value can be taken from development land in lieu of the land increasing in value after it has been developed.

The Planning Gain Supplement will be paid by land owners or developers but will be charged at a lower rate for brownfield land in order to encourage the building of homes on ex-industrial sites.

And the majority of the revenue raised will go towards building a better local infrastructure, with 70 per cent of it flowing directly to the appropriate local authority and 30 per cent going to central government.

Mr Brown has indicated this new tax will not be introduced until 2009 but critics argue that it will mean less development and will not help solve the housing shortage.


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