Are you ready for CIL?
September 2009
The Community Infrastructure Levy – a new discretionary development charge – comes into force in April 2010 and Desmond Hirsch, a director at Cambridge based commercial property consultants and chartered surveyors Januarys, is urging all developers to make themselves aware of the new levy before it comes into force.
“The Community Infrastructure Levy (CIL) marks a significant change in how developers will be expected to make a contribution for any necessary infrastructure,” says Mr Hirsch. “CIL will be charged on buildings rather than total development area and will either be on a ‘per house’ basis, or levied on non-residential developments of 100 square metres or more”.
“The government intends to introduce a formula based on the size and character of the development involved. The charge will be payable at the start of the development rather than at the planning stage".
“It’s important to note that CIL does not replace Section 106 agreements. Affordable housing, for example, will still be covered under the existing system. The facility to enter into a negotiated planning obligation using section 106 of the 1990 Act will also remain when CIL is introduced, to enable specific impacts of development to be mitigated where permission would otherwise be refused”.
Local authorities are also not statutorily obliged to bring in CIL and will be able to set their own rates, so it may well be that there is a delay in the launch of CIL in some areas, whilst in other parts of the country it may not happen at all.
“There is also the possibility that developments likely to be rendered financially unviable if the rate of CIL is too high may have the rate reduced or even become CIL exempt. There may also be more than a single rate of CIL in any given area”.
“The government sees CIL as a much more straightforward way of dealing with investment in infrastructure and its introduction comes after two years of consultation with local government and developers".