The group has called on the government to indicate the rate range as soon as possible because it “impacts residential development projects under negotiation now”.
The RPDT has been designed to “improve house building standards in the UK”.
It was developed in wake of the Grenfell Tower fire, which claimed the lives of over 72 people in 2017. The fire was started by a malfunctioning fridge-freezer on the fourth floor of the London apartment building.
CIOT said the new tax is “time-limited” and will apply to the largest residential property developers in relation to the money they make from UK residential development.
The new tax will be introduced in 2022 and seeks to raise at least £2bn over a decade. The money raised will fund measures to address unsafe cladding.
Marc Selby, chair of the property taxes committee at CIOT, said: “We understand fully the need to address unsafe cladding as a priority but we are worried about the lack of clarity on aspects of the new tax so close to its implementation.
“We are concerned that the timescale for developing and implementing a wholly new Residential Property Developer Tax ready for April 2022 is very short, for both the sector to adjust and for HMRC to implement this successfully.”
He added: “The short timescale is of particular concern for developers in the build to rent sector who will be exposed to “dry” tax charges on profits deemed to arise following completion of build to rent developments if the government’s proposals for the new tax are implemented.
“Ideally this process should extend over a longer period to ensure effective implementation and readiness among companies.”