The States of Jersey's narrow decision to reject the proposed Jersey Infrastructure Levy is the right one, says Ogier construction law specialist Claire Smith.
Today's 21-18 vote to reject the new charge leaves the Planning authorities still able to use the existing Planning Obligations system to support community projects and onsite infrastructure improvements through Planning agreements placed on developments – and Claire says that the existing system is working well and just needs to be applied more consistently.
In the run-up to the debate Claire spoke at industry events and appeared before the political Scrutiny panel as an expert witness to argue against the imposition of the new charge.
She said: "The States have made what the Jersey Chamber of Commerce and Jersey Construction Council see as the right decision – the current system of Planning Obligations has been successfully used to provide community and infrastructure contributions as part of large-scale developments for several years now.
"The additional system would have effectively produced a capital gains tax on development in addition to the current obligations framework.
"It is hard to see how the additional tax would have delivered substantial benefits – if anything, it would have meant the delivery of fewer improvements and increased building costs that would have been passed on to homebuyers at the expense of raising revenue for the States."
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