Council under fire for charging £1,000 bedroom tax on home extensions

A council came under fire today for charging residents a £1,000 bedroom tax on home extensions.

Purbeck District Council in Dorset is believed to be the first in the country to apply planning laws in this way.

Section 106 agreements usually require developers to contribute towards the community in exchange for building in an area.

It is part of the Town and Country Planning Act 1990 and includes an obligation to pay for building new roads or community facilities or to carry out tasks for the community's benefit.

Jim Knight, Labour MP for South Dorset, said it was perfectly legitimate for councils to enter in to an agreement with developers but added:
"Purbeck is taking that to an extreme so that if constituents apply for an extension to their house they are charged £1,000 on the assumption that it is an extra bedroom.

"In one case the extension was a one up, one down and they were charged £2,000 on the basis both rooms could be bedrooms.

"In that case the constituents appealed and won their appeal but that then adds a lot of extra time, burden and cost to their extension and it's not fair."

He added: "I don't mind developers having to pay more money because they are building houses to improve roads, etc.

"But it's unfair for residents because it just looks to me and to the people I represent as a money making scheme for the council rather than it being something that's fair or reasonable.

"They are taking a set of rules aimed at developers building a number of houses and applying it to normal families just trying to improve their house."

Mr Knight believes it is the first council to charge a bedroom tax in this way.

"People want to extend for various reasons not solely because they want to extend the number of people in their house," he added.

The person who successfully halved the £2,000 tax argued that one of the rooms in the extension was actually a living room.

The issue came to light following a BBC Radio 4 investigation for the programme You and Yours.

Purbeck Council said the £993 charge for each extra bedroom or "room having the capacity to be a bedroom" is used to fund transport improvements in the area.

This includes subsidised bus routes, moving signals at Wool railway station to cut traffic queues and, in the longer term, bypasses for Wool and Bere Regis.

A 2002 Government report showed Purbeck's infrastructure was at capacity and without £30 million of improvements, no more development should be allowed.

Alan Davies, development control manager at Purbeck District Council,
said: "We had this situation of do we do nothing and let this situation get worse or do we confront it."

The council needed to raise an extra £20 million to pay for the measures.

It has raised £90,000 from the bedroom tax since January 2007 and £350,000 overall including residential, industrial, commercial and retail developments.

Mr Davies said: "If they are going to add to the existing highway network by means of trips we would like a contribution towards that.

"The alternative is to refuse all planning applications or bring in a congestion charge which the council looked at and decided wasn't fair."

He added: "A lot of other authorities are looking at it very, very closely and very seriously in an attempt to raise money for highway improvements."

A homeowner, who was not named, told You and Yours: "We were a little bit shocked to find this was going to cost us an additional £2,000 on top of our planning fee, before we'd even started doing any building work.

"They were saying the downstairs room we were putting on could be classed as a bedroom too, so therefore it was subject to twice the amount.

"But we only wanted an extension to the lounge, it was not to be used as a bedroom. It was only one additional bedroom we were after, not two.

"We started off at £2,000, but our architect managed to negotiate and get it to down £1,000.

"But our planning was then refused because we hadn't paid up - we wasted three months in total before we could start building.

"I mean I could understand if you were a property developer because you can put the money on the top of the price of the property, but for the normal working man you are never going to recover that cost back."