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Roof tax to fund new roads

Billions of extra pounds for road, water and power infrastructure will be raised from a roof tax on new housing, the Queen's Speech confirmed this week.

Proposed in the Planning Reform Bill, the charge on each new home built will provide much needed funding for roads and other infrastructure needed to support new development.

Currently developers contribute to community development by negotiating a Section 106 agreement with local authorities.

The new national charge is expected to be similar to the roof tax introduced in Milton Keynes, where the levy on 15,000 new homes being built is expected to raise around £300M for infrastructure.

"Certainly in Milton Keynes it's raised substantially more money for infrastructure than we would have done using Section 106 agreements," said Milton Keynes Council leader Isobel McCall.

"The roof tax has raised about three quarters of the cost of the local infrastructure and as far as we are concerned it's the best thing around. It gives us more certainty about infrastructure than anything we have had before."

The government announced it was adopting the tariff after it agreed to abandon the proposal for a Planning Gain Supplement that would tax developers at a rate of 25% on the increase in value of their property resulting from infrastructure projects being built nearby.

The Department for Communities & Local Government is consulting with property groups and local authorities before announcing detailed plans for rolling out the tax nationally.

The Planning Reform Bill was one of several announced in the Queen's Speech on Tuesday.

Queen's Speech

- The Planning Reform Bill also includes creation of an Infrastructure Planning Commission to consider major infrastructure projects of national importance and cut through planning red tape.

- The Climate Change Bill will create a legal framework to introduce statutory targets to reduce UK carbon dioxide emissions by at least 60% by 2050 and between 26 and 32% by 2020.

- The Energy Bill will provide greater incentives for renewable energy generation.

- The Local Transport Bill would give local authorities more "freedom and flexibility" to set up local road-pricing schemes.

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