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‘Effectiveness and simplicity’ key to Tariffs regime, says RICS

RICS has published a paper titled Tariffs and the property market, outlining a number of recommendations for the proposed Tariff regime, which is expected to replace the Community Infrastructure Levy and Section 106 agreements in England and Wales.

Tariffs will take the form of a payment by owners of development land to the local planning authority. Payments will then be used to fund local infrastructure and other capital projects. The institution believes that in order to achieve the Government’s aims, a balance must be achieved between effectiveness and simplicity; sustainable development supply must be maintained while at the same time minimising planning costs and maximising infrastructure provision.

Following consultation among members, the RICS aims to help Government develop effective, workable proposals on Tariffs by proposing the following key recommendations:

  • Different levels of tariff should be set for different uses and different areas, ie lower tariffs to encourage development in deprived areas and to differentiate between green and brownfield sites.
  • Realistic and deliverable assumptions should be made when calculating tariff levels, particularly in relation to the availability of grant for affordable housing.
  • Tariff levels should be determined with regard to the viability of projects and their knock-on effect on job creation and housing supply, rather than as a result of their contribution to the cost of local infrastructure.
  • Tariffs should be regularly updated in order to keep track with changes in market conditions in order to encourage rather than deter development.
  • Open book tariff calculations should be ‘based on existing use value where necessary, to achieve site-specific viability’ and the new Homes Bonus, National Affordable Housing programme, Tax Increment Finance and tariff revenues should all be used to make schemes viable where this open book approach is used.
  • Policies should be established for the allocation of different tariffs to different types of infrastructure and locations and these should be updated on a regular basis.
  • Section 106 agreements should be limited to items ‘necessary for the delivery of developments that need to be undertaken by the local authority’.

In setting out these recommendations, the RICS also identifies a skills gap within local planning authorities and recognises the need for training in development economics. To address this problem, the RICS, in conjunction with the Department for Communities and Local Government, British Property Foundation and the Royal Town Planning Institute has launched a joint report on Training in Development Economics.

For more information go to www.rics.org

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