Anyone interested in developing land should be aware of the new Community Infrastructure Levy that is being introduced. It is an attempt to give some regularity and certainty for developers in calculating how much they will have to pay for such things as schools, roads and drains when developing a site. At the moment these are covered by Section 106 Planning Agreements in a slightly haphazard way. Unfortunately the legislation was rushed through at the end of the last parliament and is likely to result in there being two parallel systems – the Section 106 Agreement regime and this new CIL regime.
So far only five or six authorities have taken this up and most are using different ways to calculate what the CIL payment will be. As a very rough guide it could perhaps be £5000 per house, but there is no guarantee of this. Many local authorities are about to bring it in but all will have to within the next couple of years.
The advice must be to obtain Planning Permissions for developments as soon as possible. Although this was not intended to be an extra tax it looks as if things would be more complicated and probably more expensive under the new system. It is important that legal documentation entered into now such as options or planning conditional contracts contemplate these changes.