Warning on new land tax plans

Farmers and landowners across Shropshire and bordering counties are being urged to beat a possible new tax on land development by applying for planning permission now.

Shaun Jones, of Halls, the Shrewsbury-based auctioneers, valuers, estate and land agents, said all landowners ought to be aware of the Planning Gain Supplement.

The PGS, the subject of a fifth consultation report published by the Department for Communities and Local Government last week, proposes to capture a percentage of the increase in land value which results from the granting of planning permission for all residential or commercial development. A supplement, or tax, of around 20 per cent has been suggested.

For developers the proposed PGS would in part replace the cost of section 106 agreements.

"It's highly likely that a tax on the uplift in value of property with planning permission will be introduced by the Government, possibly in 2008," said Mr Jones.

"The worrying point for landowners is that there will only be a short period between any Government announcement and the implementation of the new tax."