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THOUSANDS of landowners are to be stung by a £3 billion windfall tax as part
of a massive housebuilding programme to be announced by the Chancellor on
Monday.
Gordon Brown will use his Pre-Budget Report to disclose ambitious targets for
hundreds of thousands of homes to be built over the next decade, The Times
has learnt.
As part of the Government’s response to the Kate Barker report on housing, the
Chancellor will also be pressing ahead with proposals to tax landowners who
sell their land after obtaining planning permission.
At present the value of a piece of undeveloped land can increase tenfold once
planning consent is granted but the landowner can keep the profit.
Under the plans, the Chancellor would take a proportion of the gain made by
the landowner — likely to be about 20 per cent. It is understood that this
will be earmarked to invest in homes and infrastructure for new communities
such as transport links and schools.
But the plan has already been attacked by property developers who claim that
it could lead to less land being made available for housing.
John Ritblat, the chairman of British Land, the property company, said last
month that such a tax would be “utter madness” and suggested that it could
stifle development.
Mr Ritblat gave warning that the new tax, also known as a planning gain
supplement, which is likely to apply to land for residential and commercial
development, would backfire just as the housing market was beginning to
recover.
On Monday, Mr Brown may announce different options on how the windfall tax
could be levied to ensure that it does not prohibit new developments, and he
may exclude some land.
Organisations such as the Town and Country Planning Association have said that
the money must not go back to a general pot in the Treasury. “My concern is
that the majority of the revenue money should go on providing a local
infrastructure for all communities if new housing is to come forward,”
Gideon Amos, its director, said.
Mr Amos estimated that about £3 billion a year could be raised by the new tax.
“In some greenfield sites, between £100,000 and £200,000 could be raised per
acre,” he said.
Yvette Cooper, the Housing Minister, signalled Mr Brown’s programme yesterday
after setting out the case for an urgent expansion to help first-time buyers
and young people.
Ms Cooper told The Times that within ten years only 31 per cent of all
two-earner couples aged 30 would be able to afford a home — compared with 54
per cent now. She also said that in the past 30 years the number of
households had increased by 30 per cent but housebuilding had fallen by 50
per cent. “We need to act now to make houses more affordable for the next
generation,” Ms Cooper said. “Apart from help for first-time buyers, support
for social housing and low mortgage rates, we also need to recognise the
importance of building more homes.”
In her report in March last year Ms Barker, a member of the Bank of England’s
Monetary Policy Committee, called for between 70,000 and 120,000 houses to
be built every year in addition to current plans. The Town and Country
Planning Association has also argued that at least 220,000 homes need to be
built each year — 64,000 more than at present. It is still unclear how many
extra homes will be announced on Monday. Sources said that the targets would
be ambitious even though John Prescott’s plans for tens of thousands of new
homes have already met opposition.
The Deputy Prime Minister suggested yesterday that housing developers could be
forced to disclose the scale of their landholdings to shame them into
building more homes.
Mr Brown will announce an overhaul of planning laws to ensure that the homes
are built more quickly.
Another measure expected to be included in the Pre-Budget Report is giving
local authorities a share in the profits when they grant planning permission
for privately owned land.
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