PROPERTY developers have warned they will stop providing sweeteners such as access roads and community facilities linked to projects if the Treasury presses ahead with proposals for a tax on planning permission.
Prime Minister Gordon Brown, while chancellor, developed the idea of a Planning Gain Supplement (PGS), under which developers would pay up to 30% of the profit they stood to make on improved land.
But Dan Macdonald, chief executive of Macdonald Estates, said the proposed tax would spell an end to agreements under which councils secured local improvements from developers in exchange for permission to build.
The Scottish Property Federation founder said: "Every time we make a planning application we pay our planning gain by way of road improvements, improvements to infrastructure and benefits to the community. You can't have a double whammy - this will stymie
the budget that is available."
He said developers would lobby Scottish ministers to persuade the UK Government that the issue was one of planning, therefore a devolved matter rather than a tax matter for London.
Whitehall officials hope the tax will speed up building work and help to pay for infrastructure improvements which will make development easier. But property groups are concerned that the tax could deter developers from coming up with plans, just as the construction industry is slipping into a downturn.
Macdonald said: "It is a disincentive to sell land."
? Forth Ports chief executive Charles Hammond has brushed aside concerns that the group's plans to build nine urban villages on Edinburgh's waterfront comes at a time when the property market is slowing down.
Speaking after the group announced plans for a £5.5bn investment in Edinburgh comprising 40,000 flats, Hammond said: "I don't believe there is a concern. We know there is a value gap between the established area of Edinburgh and the site we are building on. That is never going to go away and the houses and flats we are creating will fill that gap. Presently 80,000 people commute into Edinburgh every day as they can't afford it."
