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Land tax plan for Treasury is slammed

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  • Eric Britton
    Land tax plan for Treasury is slammed PLANS to introduce a development land tax that would rake in £1bn a year for the Treasury have been slammed by local
    Message 1 of 1 , Mar 1, 2006
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      Land tax plan for Treasury is slammed

      PLANS to introduce a development land tax that would rake in £1bn a year for the Treasury have been slammed by local property developers.

      Developers have added their voice to the growing chorus of protest from the Manchester property business, which has seen fears voiced by landlords, surveyors and lawyers.

      Commercial developers MDA say the plans for a "planning gain supplement" are unworkable and would stifle regeneration. Property lawyers and accountants say the tax could cause a hike in the number of legal wrangles.

      The tax would be levied on the rise in value on a piece of land once it receives planning permission. Money raised from the tax would be used to fund new infrastructure.

      Mark Evans, managing director of MDA based in Trafford Park, said: "Like most in our industry, we borrow against the expected value of land in anticipation of planning being granted. If the government then taxed us on our expected gains, we wouldn't have the funds to cover overheads, let alone building costs."

      Messy

      Anthony Sacks of Manchester law firm Rowe Cohen says the scheme could cause messy disputes over the way the tax is calculated, generate uncertainty in the development process and create blockages in the planning system. Another layer of red tape to contend with will inevitably lead to disputes over how the tax should be calculated."

      "The authorities should make the system simpler for developers and purchasers not more complicated.."

      Clive Gawthorpe, tax partner at Manchester accountants UHY Hacker Young said:

      "It will be a nice tax take for the government to the tune of £1bn a year. The Treasury is fighting tooth and nail. Property is under the scrutiny of a Treasury looking to swell its coffers. It will be complex for developers and advisers to calculate a fair tax charge and would discourage developers looking to build on brownfield sites."

      Source: http://www.manchesteronline.co.uk/men/business/s/206/206012_land_tax_plan_for_treasury_is_slammed.html

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