Andover Business
£10,000 tax on each new home
7:00am Tuesday 7th February 2012
COUNCIL chiefs are planning a tax on new homes in Southampton to raise £70m to pay for better public transport, including a £21m park-and-ride scheme and a 16m bus station.
Developers have warned the plans, which would slap a £10,000 tax on typical new three-bedroom home, will deter housebuilding and cost jobs.
Under the proposed levy, developers would be charged £10 per square foot for residential developments, £9 for retail and £1 for offices, industrial and other commercial uses.
The council sees the new levy as a way to plug a £70m gap in £528m of proposed infrastructure spending over the next 15 years.
Proceeds from the levy have been mostly earmarked for improvements to public transport, flood defences, parks and open spaces.
It could also pay for schools, hospitals and other health and social related facilities.
Developers will also continue to be asked for payments to offset the local harm caused by developments under so-called section 106 agreements.
One builder has calculated that the total cost in payments to the council of a recent development of ten flats would have been nearly three times higher with the addition of the new levy.
Mark Sennitt from Orchard Homes said: “The implications of this process are that sites will be less viable and will not come forward.
“This will have an impact on the local economy in terms of house building rates and local jobs, which goes against the grain of the Government’s current policy of encouraging more house building so as to help kick start the economy.”