A new report on Land Value Capture has been published by the Housing, Communities and Local Government Committee.

The key conclusions and recommendations that there is scope for central and local government to claim a greater proportion of land value increases through reforms to existing taxes and charges, improvements to compulsory purchase powers, or through new mechanisms of land value capture.

The Committee argues that if the Community Infrastructure Levy (CIL) is to become an effective mechanism for capturing development value for the provision of local infrastructure, it requires considerable reform. CIL is far too complex and the extensive range of exceptions need to be removed. Importantly, there has to be greater certainty that the infrastructure associated with development is actually delivered at the appropriate time, sometimes in advance of development commencing.

Charities benefit from an important exemption from CIL. A previous independent report called for reform of CIL with a new tariff with “no or very exemptions”. While the Government did not accept this recommendation and has protected the charity exemption, given this latest intervention, there will be a need to monitor this situation closely.