Government announces consultation on proposed new levy to be paid by developers to fund affordable housing and local infrastructure such as GP surgeries, transport links and schools. The Infrastructure Levy will be a locally-set, mandatory charge levied on the final value of completed development to replace the existing system of developer contributions. By charging the Levy on the value of completed development, the amount collected will increase as development prices increase, or reduce as prices drop. This according to government will make the Levy more responsive to market conditions.
Associate Director Alan Davies explained ‘the details of the reform are incredibly complex – it seeks to create a simpler, non negotiable system that can capture uplift in value. A reform of this scale represents a substantial change for housebuilders, local authorities, registered providers of affordable housing and other parts of the sector. The Infrastructure Levy will be introduced through a phased ‘test and learn’ process over several years using a small number of local authorities to begin with. On first inspection, it raises numerous more questions than it provides answers for!
