There is an article in the new edition of Town & Country Planning ( September-October 2025) entitled (Development value taxes: ideas for the future) which is worth the time to read. By four eminent experts in planning, their ideas need attention. They suggest three scenarios for change. First, whilst acknowledging CIF and S.106’s have reasons to exist they both need to play to their strengths, and not overlap. Looks like some tinkering is being suggested. Two, reforms should widen the base but not increase the individual take from individual projects, for fear of deterring incentives to build. And third, take-up by local councils of CIL should be increased by giving them more flexibility. What this entails is not explained.
It is not difficult to see why land owners and their development partners will invest heavily in professional advice to avoid these taxes, as their imposition is so uncertain. This is not the way to rapidly increase house-building, nor the way to eventually capture far more hope value. And this hesitancy seems unnecessary. At any moment of time all land and all land interests, by which I also mean leasehold interests common in urban areas too, have a quantifiable open market value. OMV may include some hope value, or it may not. Appoint qualified compensation surveyors for each side, or an independent valuer and they can determine the value of the ‘legal interest’ on the selected day. It is not rocket science. Not expensive. And the process need not take more than three to six months.,The compensation law is in place and if IE valuers are appointed they can find an equitable, credible OMV figure efficiently.
Landowners will naturally tend to have inflated opinions of the value of their legal interest. This is normal, but not a reason for the acquiring authority to pay above OMV. It is a different matter, having first established OMV,, and in the process what part of OMV comprises development value, on which CIL and s106 taxes will bite. The primary legislation will state that once a planning application is made, a calculation date is fixed. If consent is granted, the IE is appointed. Why is this simply idea not a way of proceeding now? Owners are paid their legitimate price? Councils can decide how they allocate the proceeds.
In the long term , when hope value is nil, it will not be laid. Councils clever enough to look far ahead will seek their own consents early, on ransom interests. And buy them. And why not?
Ian Campbell
12 October 2025
