Plans to introduce a levy on new developments are moving ahead despite strong opposition from local business groups.
Deputy Steve Luce, the Minister for the Environment has confirmed he is going ahead with the plans, with the next stage being asking his fellow politicians for formal approval.
The news comes just one month after various local business groups, including the Chamber of Commerce, published a letter heavily criticising the proposed levy calling it "fundamentally flawed" and nothing more than a “new additional construction specific business tax.”
Deputy Steve Luce officially submitted his proposals on Wednesday. The document states that the levy will "ensure that those who benefit from an increase in land value arising from the award of planning permission, make a small contribution to offset the impact of that development on the Island community."
Under the proposals, the levy would allocate a percentage of the profit from land development to improve the quality of island neighbourhoods affected by new development. Developers could be contributing around £80 per sqm for all new developments, with a set percentage going to the parish where building is taking place.
Non-residential developments under 75 sqm of new floor space, which is the minimum size of a two-bedroom apartment, 'affordable' homes and charitable trust projects would be exempt.
The exact rate still has to be decided, as well as the thresholds and the types of land use liable for the levy, as the report which accompanies the proposition states that the exact parameters need to be set, "...relative to economic conditions, related to costs and values, at the time."
If agreed, the levy wouldn’t be introduced until after April 2019 at the earliest, to allow developers who have acquired, or are in the process of acquiring land, to secure planning permission for development schemes.
Pictured: The JIL was heavily criticised in an open letter by a number of representatives, including the Chamber of Commerce, last month.
In a press release, the Department for the Environment said that a detailed study with local professional and industry input showed that a levy is "workable and would allow construction companies to continue to make a profit on developments." They also claimed that house prices wouldn't rise to pay for higher land costs.
Deputy Steve Luce said: "As we all know, land in Jersey is at a premium and permission to develop immediately makes it more valuable. As more development takes place, particularly in town and in our villages, there will be more need for investment in the streets, public spaces and facilities that help to support local communities and offset the impact of development.
"I believe that a community infrastructure levy is an open, workable and fair way of securing a small contribution from the landowner who makes a significant profit out of permission for land development."
Last month, representatives including the Jersey Construction Council, The Association of Jersey Architects and The Jersey Hospitality Association, sent an open letter to the Minister to voice their “concern, confusion and frustration”. Signing off, the representatives wrote: “Our joint response to the JIL consultation has deliberately been kept brief, as we feel the sentiment expressed is clear: that JIL must not be implemented.”
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