A levy on property development in Shropshire has been branded “another stealth tax” by a leading industry commentator.
Redditch-based commercial property agent John Truslove hit out after the Planning Inspectorate approved a scheme to introduce the tax next year.
Mr Truslove is highly sceptical of claims that development will be unaffected.
Shropshire Council is only the second local authority in England to see its plans for a Community Infrastructure Levy approved after a similar project by Newark and Sherwood District Council was given the green light last month. It is gradually being introduced nationwide.
The levy will mean any development which receives planning permission after January 1, 2012, will have to pay £40 per sq metre extra on new residential projects in Shrewsbury, the market towns and other key centres. In addition, a charge of £80 per sq metre will be imposed on new residential development in rural areas.
No levy will be set for affordable housing or projects which are employment related and other non-residential schemes. Developments smaller than 100 sq metres of floor space are also exempt unless one or more dwellings are created.
The council said the levy would be used for infrastructure costs such as sports facilities, drainage management and road works.
The report by planning inspector Sue Turner concluded: “The council has sufficient evidence to support the schedule and can show that the levy is set at a level that will not put the overall development of their area at serious risk.”
Mr Truslove said he doubted that claim.
He charged: “This is just another stealth tax.
“I would very much like to see evidence to confirm that development will not be affected by yet another financial outgoing.
“The property market, both commercial and residential, remains in a fragile state. Financial impositions such as this can only damage it further.
“The Government needs to get a grip of this sort of thing – business cannot sustain repeated visits to the money well by the likes of wasteful councils.”
The charging schedule is due to be adopted on November 24 and any undetermined applications at the turn of the year will be liable for the levy, regardless of when they were submitted.
The levy will largely replace Section 106 agreements. The Government maintains it will provide more certainty for developers and cut lengthy negotiations. It claims the new system will be more transparent, with CIL levels set by councils in consultation with local communities and developers.
It has been estimated that the new system could allow councils to raise as much as £700 million extra per year.