Community Infrastructure Levy: As a Residential Property Home Owner Does it Matter to Me?
Sarah Wray, a partner in our residential conveyancing department, investigates the impact of the Community Infrastructure Levy on residential home owners.
What is it?
The Community Infrastructure Levy (‘CIL’) is a local authority charge which is imposed on new development in their area. Local authorities use this charge to help fund essential infrastructure. This can include funding for roads, schools, medical facilities and recreational areas.
Before CIL is imposed on the area, the local authority will hold a consultation and obtain approval of a charging schedule. This schedule will be published on their website, illustrating the levy rates per square metre. Once the schedule has been adopted, all development will be subject to the levy unless exempt.
Which properties are liable to CIL?
New developments may be liable if they create an additional floor space of at least 100 square metres or if they create a new dwelling.
The following are not liable for CIL:
- Buildings people normally don’t go into.
- Mezzanine floors in an existing building are not liable unless they are part of wider planning permission.
CIL may be payable on new developments whether they are permitted by planning permission, or by permitted development. When applying for planning permission, a CIL form must also be completed and sent to your local authority. There are additional forms to complete throughout the process depending on your development and reliefs.
Relief from CIL
There are various reliefs from CIL, but if you are a residential home owner, the most relevant include:
Residential annexes and extensions
There is a strict process of consent for this to apply. The extension must be for your main residence and you must have a material interest in it. Extensions to a property where less than 100 square metres of additional space are created and that do not create a new dwelling are already exempt.
Annexes are exempt if they are built within the curtilage of the principal residence and comprise one new building. However, if you let or sell the annex/home independently from the other, within 3 years of the compliance certificate, the exemption is withdrawn and CIL will be payable.
It is important to note that a commencement notice must be submitted prior to building, this cannot be retrospective. There are various forms which must be submitted along the development which can be found on your local authority’s website.
Houses and flats built by self-builders
This involves someone building their own home or commissioning it from a contractor or house builder. The individual must occupy it as their principal residence for a minimum of 3 years after the work is completed for the exemption to be available
Again, this must be applied for in advance. You must follow the procedure of obtaining consent, submitting a commencement notice and submitting evidence and a completion form within certain timescales to remain eligible for this exemption.
Payment of CIL
Landowners are liable to pay CIL on commencement of development, although someone else involved in the development may take on this liability. If no one assumes liability before the development, it defaults to the landowner. CIL runs with the land, so landowners can become liable if the person who assumed liability is unable to pay. This is something to look out for if you are buying a new build property.
What does this mean for a residential home owner?
The main concern is applying correctly for the reliefs. You must be aware of CIL at the outset and if you are in a CIL area, follow the procedure and forms specified by your local authority.
Failure to correctly submit the forms, or applying for a relief retrospectively can either result in a surcharge payment or rejection of the relief and full liability for CIL.
If you are also interested in a lease or buying a newly built property, you should establish whether CIL has been paid and if not, who has assumed liability.
If you are purchasing a property, the local search undertaken as part of the process reveals whether your property is in a CIL area.
If you would like further assistance with your residential property or advice on CIL, please contact our Residential Conveyancing team.