Developers welcome further Community Infrastructure Levy reform

The property industry has welcomed further changes to the Community Infrastructure Levy (CIL) after raising concerns with Government that the development tax risked becoming unworkable and would frustrate economic growth.

The Department for Communities and Local Government announced today that it was pressing ahead with a number of reforms to CIL, including:

  • Broadening the selection of buildings covered by the vacancy test;
  • An exemption for certain highway agreements from proposals to restrict their use;
  • An exemption for residential extensions and annexes from the levy;
  • A requirement on authorities to balance CIL infrastructure funding with its potential effects on a development’s viability;
  • Allowing authorities to set differential rates depending on the extensiveness of the development;
  • Moving the date from which the pooling restrictions on Section 106 apply nationally to April 2015.

The British Property Federation (BPF) said it supported the changes, which were outlined in a consultation paper published in May. The BPF had welcomed the proposals but warned that where local authorities had already set levies, they were often too high and acted as a brake on development, contrary to the Government’s other pro-growth measures aimed at kick starting the industry.

Liz Peace, Chief Executive of the BPF, said:

“We’re pleased the Government has listened to the concerns of the property industry and has agreed to amend a policy that would have otherwise held back development and put a brake on economic growth. As ever, the devil will be in the detail and we look forward to seeing the revised regulations and guidance when they are published.

“Despite the proposed changes there are still concerns that some charging schedules are being set too high, particularly for some uses. Local authorities should provide a proper evidence base and assess whether or not their CIL will stifle rather than support growth.”