Community Infrastructure Levy – what is it and are there any exemptions?

Community Infrastructure Levy (CIL) is a charge on new development with the proceeds to be allocated to local and regional infrastructure.

It is paid primarily by the owner or developer of the land being developed. It has been introduced gradually since about 2010 as it requires each local authority to have elected to charge it and to set out its charging schedule.

If a local authority has elected to charge CIL it must set out those charges and it will apply to each additional floorspace of 100 square metres or more or if a new home is built. There are some limited exemptions relating to the development itself: for example, if you build an extension to your house or if you build your own home but there are strict rules setting out those exemptions and various procedures that may apply.

A local authority may set different rates of CIL and the variations may be set on the basis of geography, the proposed use of the development or the number of new homes built. The rates will be revised in line with inflation each year.

Some organisations are exempt from CIL liability: a charity is exempt from CIL where the development is being used entirely, or almost entirely, for its charitable purposes. A charity may be exempt, but only on a discretionary basis, if the development is for profit but additional requirements apply. There is also a relief for social housing providers. There is a final “exceptional circumstances” relief but it is discretionary and a recent case indicates how rare that relief is likely to be.

Planning permission was granted for a new dwelling, but the home being built was to house an agricultural worker and the permission imposed an agricultural tie which meant only someone (or their family) working in agriculture could live in the home. A house built with this condition is often worth up to 30% less than a home without this condition and the owner of the land appealed against the CIL liability on the basis that it made the development economically unviable. The owner appealed but was unsuccessful and the CIL liability stood.