Property specialist Richard Carr believes the government review into development tax Community Infrastructure Levy (CIL) is long overdue.
Community Infrastructure Levy is a development tax which is paid by developers to fund local infrastructure. However, it’s widely acknowledge that the tax has become overly burdensome and inefficient.
The British Property Federation (BPF) has welcomed the government review and despite being supportive of CIL, says it is the country’s biggest bugbears in the planning system.
Richard Carr has previously spoke of how out of touch CIL was in regards to the current planning landscape: “CIL is a blunt instrument dreamed up by the last Labour government, which is fundamentally flawed and should only be implemented on Greenfield sites that are inherently cheaper to develop.”
The BPF believes it’s crucial that local authorities are encouraged to regularly review their own changing schedules against market conditions.
Calls have also been made for the government to clarify the differences between CIL and s106 agreements. Initially, CIL has introduced to fund infrastructure requirements whilst the s106 tax was introduced to help affordable housing provision.
However, Richard Carr believes that the two have virtually become the same. Until this issue is resolved being able to provide a CIL charge setting at the right level will prove almost impossible.
“Many of our members cite CIL as one of the biggest bugbears of the planning system, and there are plenty local authorities who would agree. Whilst some would like to see it abolished altogether, we believe that with the right changes, CIL could be a useful tool for ensuring infrastructure delivery on development sites,” said Melanie Leech, chief executive of the British Property Federation.
“CIL was supposed to provide a quicker, fairer and more efficient way of delivering infrastructure to support development and our members have always supported this principle, but we are concerned that in many places it is not working. We look forward to engaging with the review panel to ensure that CIL becomes less of a burden and more beneficial,” she added.
Richard Carr believes that the above taxes are seriously afflicting the level of house building in the UK and in turn preventing the economy from growing.
He maintains that CIL is stopping development as it is calculated on ludicrous ideals and is basically a development land tax; why would you need to pay CIL on underground Parking for example!?