New rules to prevent councils “double dipping” on developments
Author: Keith Cooper, Local Government Chroncile |
The government has updated its planning tax rules in a bid to stop councils’ “double dipping” by charging developers twice.
Revised guidance for the infrastructure levy regime aims to clear up a confusion which the industry feared would let authorities bill them for both the levy while expectimg them to carry out works agreed under section 106 planning deals. The new rules will ensure there is no double charging by “clarifying the relationship between the levy and Section 106 planning obligations” the Department for Communities and Local Government claims.
The infrastructure levy is a relatively new local development tax which councils can impose on developers to help pay for community improvements. The government predicts it could be used to raise up to £1bn over the next three years. Section 106 deals are legal agreements in which developers agree to carry our specific works in exchange for securing planning permission for profit-making schemes.
Planning minister Nick Boles said the guidance had been drawn up after consulting both councils and private developers. “Only councils developing levy rates will need to consider this new guidance,” he added.
The changes have been welcomed by both the house building industry and the LGA.
“We are pleased that it assists in clarifying the relationship between the levy and Section 106 planning obligations,” Stewart Baseley, chairman of the Home Builders Federation said.
Clyde Loakes (Lab), vice chairman of the LGA’s Environment and Housing Board, said the revised guidance now reflected good practice. “The evidence from the small number of schemes now in operation indicates that, in the main, the CIL is working well and has not constrained development, reduced the viability of projects or been combined with Section 106 agreements to ‘double dip’.”