THE GOVERNMENT is considering introducing a windfall tax on land prices to help fund local development projects, reports the Guardian.
The idea is also supported by some senior Tories who share the government‘s interest in tapping into some of the huge rise in value once the land has gained planning permission.
The idea of a land tax was first mooted last year when Kate Barker – a member of the Bank of England‘s monetary policy committee – recommended the tax known as a planning gain supplement after a year long review of the UK‘s future housing needs.
“It is certainly on the Treasury‘s radar screen,” she told the paper.
The Treasury is due to begin consultations this autumn.
Ms Barker‘s review said: “The government should actively pursue measures to share in these windfall gains which accrue to landowners so that these increases in land values can benefit the community more widely.”
“The value captured can then be used as a funding stream for a number of other policies,” it adds.
The report proposes implementing the levy at the point when planning permission is granted by a local council.
“The planning gain supplement would fall mainly on landowners, with little impact on house prices,” it maintained.