Call for windfall tax after field rezoned for housing fetches £3.5 million

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A WINDFALL tax proposal to recover some of the profits generated from rezoning land for development will be brought forward, the Environment Minister has said – after a field in St John was sold for millions of pounds.

Deputy Jonathan Renouf made the comments following the purchase of field J1109 – next to Sion Chapel on Grande Route de St Jean – by Melrose Homes Ltd for £3.55 million.

With agricultural land estimated to be worth between £7-10,000 per vergée – depending on its quality – the 6.71-vergée site could have been worth around £70,000 before the rezoning.

The field was included on a list of sites specifically rezoned for the provision of affordable homes within the Bridging Island Plan under policy H5, which means its development for any other use will not be supported. The bridging plan was approved in March this year.

In a JEP column published in December before he was elected to the States, Deputy Renouf said that a windfall tax should be imposed on the rezoning of fields for development, describing the subsequent increase in land value as a ‘colossal unearned gain’ for the owners.

Commenting on whether he would introduce this tax now he was Environment Minister, he said: ‘It is a source of great regret to me that the Bridging Island Plan did not include a mechanism to capture the increase of land-value uplift that came with rezoning.

‘I am unable to act retrospectively in this regard. However, the Bridging Island Plan contains provisions for a Sustainable Communities Fund which would put in place a mechanism to recover some of the land-value uplift that occurs when fields are rezoned in the future.’

The Bridging Island Plan states that this fund could be delivered through a planning charge or levy on the jump in land value when planning permission for a development is granted. It said that such a charge would be ‘fairly applied at a published standard rate’ based on the amount of new floorspace being provided.

Deputy Renouf said he was ‘highly supportive of this policy’ and would be bringing forward proposals ‘to this effect’ during his term of office.

‘In terms of the future, it is worth remembering that any future rezoning is in all likelihood some way off, given that I will be proposing that the current Bridging Island Plan be extended into the next Assembly.

‘It is also worth remembering that rezoning is a process judged against criteria – just because a field is offered for rezoning it does not mean that will be the eventual outcome,’ he added.

Philip Johnson, who lives on Grande Route de St Jean, raised concerns over the use of greenfield sites for housing.

He also said there was a risk that more landowners could be tempted to sell their fields for large sums of money to private developers.

‘I’m not against building housing as there is a shortage, but greenfield sites should be the last resort,’ he added.

Mr Johnson said that greenfield sites were meant to be ‘sacrosanct’, but had been ‘nibbled away’ within the Bridging Island Plan.

‘If you are going to rezone green land then shouldn’t the government buy it for green-land prices rather than it being sold to private developers?’

Deputy Hilary Jeune, who is a St John resident as well as an assistant environment minister, said that housing supply was a major issue – but that homes should be built as part of a community plan.

This, she said, would consider things like amenities, public open green space, community facilities and alternative transport options.

‘Before more shovels go in the ground we need a community plan, [whereby] every development in future shouldn’t be considered on its own. I know that Sion residents want to look at it from a community perspective instead of ribbon development,’ she added.

Addressing Mr Johnson’s comments about green-zone land being sold to private developers, she pointed out that the conditions set within the Island Plan regarding the field’s use – such as policy H5 – were ‘firm’.

‘It’s important that we have strong planning regulations and stick to them,’ she said.

The field’s vendor, Anthony Le Brun, said he felt ‘very strongly’ that the sale ‘will also benefit other families who will be able to get on the housing ladder’.

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