No funding yet to progress plans to charge ‘windfall’ tax on fields

Planning. Field J1109 just before the Sion Chapel Picture: JON GUEGAN. (37766287)

PLANS for a windfall “charge” to recover some of the vast profits generated when a field is rezoned for housing are on hold due to a lack of funding, it has emerged.

Last April, States Members backed the majority of a proposal from Reform’s Deputy Raluca Kovacs calling for some form of charge – such as a tax or levy – to be introduced to raise revenue from any significant uplift in the value of land arising when it is rezoned or from when planning permission has been granted.

The successful proposition required ministers to come forward with plans for new legislation by 31 March 2025.

At the time, Deputy Kovacs outlined the significant value uplifts in land following development, giving the example of Field J1109 in St John.

As revealed by the JEP in a front-page exclusive, it sold for £3.55m after it was designated an affordable-homes site in the Bridging Island Plan.

That represented an approximate 50-fold increase in value, as, before the rezoning, the 6.71-vergée site – next to the former Sion Chapel – was estimated to be worth around £70,000.

But it has now emerged that work to do this has not been able to go ahead because the previous government decided against funding it in the Government Plan.

Following questions from Deputy Hilary Jeune, Environment Minister Steve Luce revealed that a bid had been made for funding that would have provided resources to “research, analyse, consult stakeholders and provide recommendations” last year, but it was ultimately “unsuccessful”.

“The work required to be undertaken, to develop an appropriate charging mechanism and the legislation required for it to operate, remains unfunded and cannot, therefore, be progressed,” he said.

As such, he said that he was unable to provide a timeline for the potential introduction of such a “charge”.

“This work will remain pending until such time that resources are made available to enable it to be undertaken,” Deputy Luce said.

The idea of such a windfall “charge” or “tax” has been raised numerous times over the decades.

In more recent years, successive Environment Ministers have struggled to get it over the line.

Former Environment Minister John Young also frequently called for the introduction of a land windfall tax.

His predecessor, Deputy Steve Luce, who resumed the role following the vote of no confidence in Kristina Moore, tried to introduce an obligation for landowners to pay for community infrastructure in December 2017, but it didn’t go ahead after strong criticism from the construction and development industry.

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