Issue 1 – January 2008

Community Infrastructure Levy

In the Autumn 2007 pre-budget report, the Chancellor (Alistair Darling) announced his intention to introduce a levy to capture an appropriate proportion of the increase in value of a piece of land generated by the grant of planning permission for its development.

Billed as a type of Roof Tax along the lines of the scheme introduced locally in Milton Keynes, landowners and developers need to remain cautious about this until flesh is put on to the bones of the proposals thus far announced. The provisions are contained in the Planning Bill currently making its way through Parliament, but this itself will only authorise the Secretary of State to establish a Community Infrastructure Levy by making subsequent regulations. Only the general principles are actually laid out in the Bill.

The aim of the levy, says the Bill, is to ensure that costs incurred in providing infrastructure to support the development of an area are at least partly met by landowners who have benefited from it.

The proposal is that the liability will arise on the grant of planning permission, but that the levy will not become payable until the planning permission is implemented. The liability for payment will be that of the landowner and contracting parties will no doubt allow for this in negotiating the financial aspects of any development transaction.

Watch this space for more information as these proposals are developed further, in time for their anticipated launch in 2009.

For further information contact oliver.goodwin@mishcon.com

For further information contact rachael.jordan@mishcon.com