A FRESH attempt to introduce a windfall tax on the vast profits generated from the sale of land rezoned for development has been ‘broadly’ supported by the government.
The Council of Ministers has lodged an amendment to a proposition put forward by Reform Jersey Deputy Raluca Kovacs, which calls for a land development tax ‘or an equivalent charging mechanism’ to be introduced to raise revenue for the States from any significant uplift in the value of land, from when it is rezoned or planning permission has been granted.
Deputy Kovacs’ proposition seeks to end years of political debate about whether to tax the large sums of profit that can be generated after land is rezoned.
Last year saw field J1109 in St John sold for £3.55 million after it was designated an affordable-homes site in the Bridging Island Plan.
Prior to the rezoning, the 6.71-vergée site – located next to the former Sion Chapel – was estimated to be worth around £70,000.
The Council of Minister’s amendment asks that the wording of Deputy Kovacs’ proposition be altered to remove references to ‘tax’, on the basis that the new charge could take the form of a tax, levy, or ‘some other mechanism to extract value’.
It also seeks to extend the date by which the necessary legislation would need to be brought forward for approval, from Deputy Kovacs’ target of 31 March 2024 to 31 March 2025.
‘The Council of Ministers is broadly in agreement with Deputy Kovacs’ policy aim to introduce a charging mechanism to capture a proportion of the uplift in land value arising from land being rezoned or when planning permission is granted, while being mindful that this needs to be well-framed to avoid undue disincentives or delay in developing land,’ the amendment’s accompanying report read.
Deputy Kovacs said she would be continuing discussions with the Council of Ministers and the government officers working on the proposals.
‘In my opinion they could do it earlier, but I think it’s a positive step,’ she added.
‘Hopefully we can take action sooner rather than later.’