The Community Infrastructure Levy (CIL) is a new tax that local authorities in England and Wales can choose to charge on new developments in their area. The levy is designed to be fairer, faster and more transparent than the previous system of agreeing planning obligations between local Councils and developers under section 106 agreements of the Town and Country Planning Act 1990.
In areas where a community infrastructure levy is in force, land owners and developers must pay the levy to the local Council.
The charges are set by the local Council, based on the size and type of the new development. Some Councils have already implemented the CIL whilst others are still at the consultation stage.
Reading through the proposals the CIL is designed to be non-negotiable. No CIL, no development. However, if developers are going to continue building housing stock to still meet the housing need they will will still need to generate a profit and with the addition of the CIL margins may become unviable. Unfortunately CIL will slow down any recent growth in house building with more sites becoming unviable to build on. This will also undoubtably lower the number of affordable houses from each scheme.
Cornwall CIL Watch
The consultation on the preliminary draft charging schedule closed on the 22nd April 2013.
Cornwall Council propose three charging zones for residential development, with charges of £0, £40 and £100 per square metre. The Tax taken from one area will in many cases benefit another i.e. If a self-builder/developer proposes to develop one house with a floor area of 150 square metres (Family sized house) in Morwenstow (North Cornwall), they will have to pay £15,000 toward the CIL and this could be spent in Helston which is proposed to pay nothing for development.