As part of RICS’ calls on Government to look holistically at long-term improvements in the housing market, new policy recommendations call for a more transparent land taxation system based on research funded by RICS Research Trust.
To remedy the current housing issues, especially those concerning affordable housing and local supporting infrastructure, among its recommendations in Policy Position Statement: Land Value Capture, RICS calls on Government to not just focus on developer contributions when working on the Planning for the Future Review.
The recommendations are founded from the research: Land value capture: Attitudes from the house-building industry on alternative mechanisms which highlights the potential pitfalls of the current taxation system and overwhelmingly demonstrates the moral obligation on the state to clarify the purpose of land value capture (LVC) mechanisms and on the development industry to clarify its contribution.
Tamara Hooper, RICS Policy Manager commented: “The current taxation system is complex and erratic in its application which can ultimately lead to hostility against new developments and those building them.
“If Government really want to solve the issue of housing, they need to widen their interest in land value capture. Land value capture: Attitudes from the house-building industry on alternative mechanisms illustrates that they are still only looking at proposals aimed at developers and not at proposals aimed at landowners or land.
“RICS has long championed change within how we utilise and develop our land effectively and efficiently. There is a need for Government to look at all sections of the residential chain in terms of taxation and should be utilising this opportunity of their ambition for ‘radical reform’ to examine how they can streamline taxation and best capture funding to ensure that all those who benefit from development pay their fair share.“
Further key RICS recommendations Policy Position Statement: Land Value Capture include:
- As part of their Planning for the Future Review, the UK Government must ensure that they don’t just examine the feasibility of developer contributions, but land contributions as well to guarantee that they embed a thorough funding system that best meets and delivers the required funding from the most appropriate funding mechanisms. This review should consider land taxation as a whole to ensure it fair, transparent and holistic.
- Government must ensure that any form of taxation implemented to deliver essential infrastructure provides clarity in its ambitions and is transparent in its distribution and application.
- Government must ensure that all taxation raised from developer contributions or land value capture must be ring fenced for supporting infrastructure with priority given to the local area in which the funding is raised.
The research, on which RICS policy is founded and funded by the RICS Research Trust, shows there is widespread interest in alternative LVC mechanisms from across the UK but advises that local planning authorities need the right training and resources to implement such changes; any changes need to take into account the potential impact on the supply of land and further research is required before such mechanisms are put in place.
Dr Richard Dunning, Department of Geography and Planning at the University of Liverpool, commented: “Our research on attitudes towards land value capture suggests that the house-building industry will welcome many of the changes identified in the Planning for the Future Review. But the details of proposals will need significantly more development and nuance for “more, faster, better” to be realised.”
The Chair of the RICS Research Trust, Professor Sarah Sayce, commented: “Land Value Capture has been a contentious matter for very many years involving, as it does, matters of social equity as well as spatial planning policy. The report provides important insights and assists the Trust in its aim of supporting work which advances knowledge for public benefit.”
These calls are the latest in a series of measures to address the housing supply crisis in the UK, while driving the economy, and follow on from RICS’ calls for a new land classification, Amberfield; the ramping up of modular home use; and further interventions into planning and development, home ownership and the private rented sector.