This paper summarizes the assumptions, methods, findings, and conclusions of a study conducted in support of Portugal’s ongoing revision of the Land, Territorial Planning, and Urbanism Act. It emphasizes that municipalities need economically and financially sustainable urban development operations, since planning decisions often increase land values and create surplus gains that should serve the public interest. The study reviews how fiscal land policies strongly shape markets and land use, and proposes a new municipal instrument to capture part of these unearned increments: a 20% levy on the land-value increase generated by plan-assigned building capacity (m²) in specific interventions. A case study from Lagoa (Algarve), within the Urban Development Plan of Planning Unit 11, applies the method by calculating buildable capacity, surplus values, and the corresponding fee to be charged to developers. The proposed mechanism strengthens municipal finances, improves transparency in the sources and uses of public funds, and helps redirect planning-generated gains toward social purposes, with potential for replication across municipalities.