New CIL regulations come into effect this week

The Community Infrastructure Levy (CIL) exemption for self build homes introduced this week is just one of a raft of changes that have come into effect, many prompted by property industry concerns that the emerging system is at risk of becoming unworkable.

Underpinning the system from now on will be a new requirement that local authorities strike an appropriate balance in CIL charging schedules between funding infrastructure and not threatening the economic viability of development.

There are also several changes that will make the CIL system more flexible:

  • charging authorities will be able to set differential rates according to the scale of development, based on either commercial floorspace or the number of new dwellings (except local authorities that have already published a draft charging schedule, which must stand)
  • payments in kind will be allowed though the provision of on-site or off-site infrastructure, where before they could only take the form of land provision
  • the ‘vacancy test’ designed to bring more buildings back into use without incurring a levy is relaxed – buildings must have been in use for six continuous months out of the previous three years, rather than the previous 12 months under current rules, if the levy is to apply only to the net addition to floorspace
  • recognition of phased development in the planning process will allow for separate payment commencement triggers
  • discretionary social housing relief is offered for certain types of housing for sale.

The new CIL regulations also formally extend the deadline for allowing local authorities to pool Section 106 contributions from separate developments to fund an infrastructure project from April 2014 to April 2015.

Updated CIL guidelines are expected to be published shortly.

The British Property Federation says it welcomes the direction of travel of the revised regulations, but is still concerned that the more significant changes could be subject to so many caveats that they risk being less than useful. ‘The guidance [will be] crucial to ensure that these regulations will encourage development and that implementation is as smooth as possible,’ said chief executive Liz Peace.

Posted on Thursday 27th February 2014