The British Property Federation (BPF) has welcomed the government’s proposed changes to the community infrastructure levy - a tax on property development.

The ‘per square foot tax’ on new development is designed to largely replace s106 agreements, with the money raised spent on a wide range of infrastructure needed to support the development.

The BPF had previously raised its concerns that the levies were being set too high and could act as a brake on development.

The government’s proposals include:

Changes that will ensure councils provide greater clarity on how they have set the proposed level of levy and more transparency about what developers will be charged;
Allowing councils to accept levy payments in kind from developers providing infrastructure instead of cash or land to ensure timely delivery of infrastructure;
Ensuring that where planning permission is phased, levy payments are also phased to help get development under way as soon as possible;
Enabling councils to make discount market sale housing exempt from levy charges;
Removing the vacancy test, meaning the levy will not generally be payable on buildings that have been vacant for a certain amount of time, but are being refurbished or redeveloped to bring them back into productive use. The levy would still be payable on abandoned buildings or vacant buildings being redeveloped with an increase in floorspace;
Allowing councils that have not adopted the levy to continue to pool contributions from different planning obligations for an extra year. This will now give councils who have not started the process of adopting the levy until April 2015 to take on board any regulatory changes that arise from this consultation;
Changes that could save self-builders money by ensuring they are exempt from paying a levy charge that must be paid for all new buildings over a certain size.

BPF Chief executive Liz Peace said: "If the homes and jobs that are so desperately needed are to be forthcoming, it is imperative that schemes are not held up by flaws in the mechanics of the community infrastructure levy.

“We are delighted that government has worked with the industry and listened to our concerns, and that many of these issues are to be consulted upon. It’s now important the government gets on with implementing these amendments, particularly with development in much of the country is at a standstill.”