Planning gain

Planning gain refers primarily to the increase in the value of land which results from planning permission being granted for that land. This increase in land value mainly accrues to the owner of the land, but a levy or tax may be applied to divert some of the planning gain to the public sector. In England and Wales, such arrangements are currently negotiated between the developer and the council, and take place under the terms of Section 106 of the Town and Country Planning Act 1990. In Scotland the equivalent is a Section 75 planning obligation (Section 75 of the Town and Country Planning (Scotland) Act 1997).

Reception of Section 106 Agreements

The planning obligations agreed with developers through Section 106 agreements are sometimes criticised for:

inconsistency

unfairness

lack of transparency

length of time to negotiate

some obligations being unlawful

obligations not actually within Section 106 of the Act

better alternative

Better Alternative: Experience shows that S106 negotiations delay the planning process and is costly to both the developer in legal/planning advice and costly to the planning authority in terms of professional officer time. An annual Land Value Tax is a much more effective alternative which does not incur these costs and delays.