The reports in the Estates Gazette that, at a recent high level Ministerial meeting the decision has been made to abandon PGS, should be welcomed by all in the development industry says Roger Pryor, Partner of Strutt & Parker.

The principle concept – that a development tax based on enhanced planning gain value would increase the supply of land for residential properties – was fundamentally flawed and was entirely contrary to experience from previous attempts to tax development gains. In theory the valuation approach has merits, but as soon as the detailed implications were considered it became clear that this would become an area of contentious assessments which would inevitably delay the development process.

If the Government confirm this decision they should be congratulated for recognising the weight of objection generated through the consultation process.

The alternative, a Milton Keynes style roof tax, will now be considered. This provides for a fixed tariff per residential unit to cover all offsite infrastructure costs. The industry will welcome a sensible approach to ensuring major developments contributed to necessary off site infrastructure schemes as a replacement for the current Section 106 negotiations.