Using Land Values to fund Infrastructure:

The UK government has set a target of constructing 3million new dwellings by 2020 and funding is required to provide the necessary infrastructure to support this proposed development. Initially, the government consulted on a Planning-gain Supplement (PGS) which would impose a levy at a “modest ” rate on the uplift in value which resulted from a grant of planning permission. Following widespread protests by the property industry against this proposed betterment tax and further government consultation, PGS has been abandoned and a new Community Infrastructure Levy (CIL) proposed. The CIL will be negotiated by individually by representatives of local planning authorities, alongside the existing s. 106 obligations which also raise funds for infrastructure but only for infrastructure which can be said to be relevant to the specific development. What is different about CIL is that the revenue will be hypothecated to support infrastructure for the locality in which the development is based, with a portion of the revenue going to larger regional projects and that it seems to be well supported by the property-based industry representatives. Yet there remains uncertainty as to whether a betterment tax has in fact been abandoned