Land tax could mean 2,000 fewer homes built a year UK
Land tax could mean 2,000 fewer homes built a year
Housing associations would build 2,000 fewer homes a year if they were forced to pay the planning gain supplement, the National Housing Federation warned this week.
The extra cost would jeopardize the delivery of the national affordable housing programme and would prevent associations from meeting the government's housing targets, the federation said.
In its response to the consultation on the supplement, which closed this week, it added that the knock on effect could also severely restrict housing associations' ability to deliver the sustainable communities plan.
The federation has now called for further discussions with the Housing Corporation on the likely impact of the supplement on public subsidy.
'It is ridiculous to have a situation where public funds are being pushed between departments,' said Nick Powell, policy lead at the National Housing Federation.
'We are concerned about the impact that payments will have on grant requirements and consequently the impact that might have on meeting affordable housing targets.
'The headline is that it will affect our ability to deliver what the government wants us to deliver.'
The federation said that an assumed rate of 20 per cent planning gain supplement could add 5 per cent to the grant cost of a typical mixed tenure scheme on both greenfield and brownfield land.
The Housing Corporation would only confirm that it would work with stakeholders on issues raised in the
Officials from the Treasury and the Office of the Deputy Prime Minister met a number of groups from the sector last week in an attempt to iron out details in the consultation.
Chris Hart, deputy chair of the Royal Institution of Chartered Surveyors' taxation policy panel, said there were still a number of technical issues that remained to be addressed.
But despite the direction of travel he said that at a meeting on Friday the Treasury had refused to rule out the possibility it may yet consider a system of tariffs. 'At the moment it is all in a state of flux,' he said.
Liz Peace, chief executive of the British Property Federation, claimed the government had failed to talk to key stakeholders before publishing the consultation on the supplement. The uncertainty was already adversely affecting the property market, she said.
Published: 03 March 2006