All you need to know about the CIL

by | Feb 5, 2021 | Extensions, New Builds, Your Home

What is the Community Infrastructure Levy?

If you are building a new house or adding an extension to your current home, you have come to the right place. Arkiplan is here to help you through the beginning phase of this process, starting with what you need to know about the Community Infrastructure Levy (CIL).

This charge is imposed by certain local authorities in England and Wales, to assist in maintaining and improving the local infrastructure that your build could impact. While this levy is a well-thought-out solution for areas where builds are taxing on the existing infrastructure, the impact on people building new homes or extending current ones is significant.

On average, you could expect to pay £95 per square meter (area dependant). These costs could cause home builders to outshoot their budgets or not build at all.

Do I have to pay the Community Infrastructure Levy?

The first step you need to take is to contact your local authority to find out if they have a charging schedule that has been consulted on and published. Be sure to ask if they have a schedule that is being worked on and if so, when do they expect it to be published.

If you are wondering whether your new home or extension falls under the CIL structure, usually developments that create an additional 100 square meters or more are possibly liable to pay the levy.

If your home or landfalls in an area that has established a CIL, you can still be exempt from paying the levy under the Self-Build regulations. A self-build is anyone who builds a house or extension for the sole-purpose of residing in the property afterwards. Whether you are building yourself or commissioning the work, you need to prove that it is your principal residence for a minimum of three years from completion of the build or extension.

If this applies to you, then follow these four steps to acquiring a possible exemption from paying the Community Infrastructure Levy. It is important to note that steps one to three have to be completed successfully before the commencement of your build or extension. Step four is done after the build is complete.

Step One of the Community Infrastructure Levy Self-Build Exemption

You need to assume liability for paying the CIL on the house build or extension. Complete the Assumption of Liability form (Form 2) here. If an existing levy liability on the property is under a different name, you will need to complete a Transfer of Assumed Liability form (Form 4). Once this is done you need to submit this to the collecting authority in your area.

Step Two of the Community Infrastructure Levy Self-Build Exemption

Next, you have to prove that your build qualifies as a ‘self-build’ development. You can do this by submitting a Self-Build Exemption Claim Form – Part 1 (Form 7).

You also have to certify the following:

  • the name and address of the person(s) claiming liability;
  • that the project is a “self-build project” for purposes of the exemption set out within the regulations;
  • that you will occupy the premises as your principal residence for a period of 3 years from completion;
  • that you will provide the required supporting documentation on project completion to confirm your development qualifies for relief; and
  • the amount of de minimis State aid you have received in the last 3 years prior to the submission of the application for relief.

After you have done the above, the local collecting authority will confirm your exemption approval and amount in writing.

Step Three of the Community Infrastructure Levy Self-Build Exemption 

Before you start any kind of building or work on your property, you need to send the collecting authority a Commencement notice (Form 6), only after you have received the above confirmation of exemption. This notice will have the date you will be starting the development, so make sure they have received it before then. If you are not sure if it has been received, call your local authority to make sure.

Step Four of the Community Infrastructure Levy Self-Build Exemption 

Once you have completed your new home or extension, submit a Self-Build Exemption Claim Form.

with the below-supporting evidence within 6 months of receiving your compliance certificate. At this point, if you do not submit this or decide to move within three years – you will be liable to pay the CIL levy in full.

List of evidence to send to the collecting authority:

  •   Proof of the date of completion – a copy of the building completion or compliance certificate for the home issued by Building Control
  •   Proof of ownership – a copy of the title deeds (freehold or leasehold)
  •   Proof of occupation of the dwelling as the applicant’s principal residence – a Council Tax bill or certificate – and 2 further proofs of occupation of the home as a principal residence (a utility bill or bank statement or confirmation that the applicant is on the local electoral roll)

Additionally, one of the following need to be supplied:

  •   An approved claim from HM Revenue and Customs under ‘VAT431NB: VAT refunds for DIY housebuilders’; or
  •   A Specialist Self-Build Warranty; or
  •   An approved Self-Build Mortgage from a bank or building society.

While this process may seem daunting to self-builders, it is the best way to save money and meet your budget. Another way to do this is to get your Planning Drawings and Building Regulations Plans done professionally online through Arkiplan.