Community-led housing and the community infrastructure levy

Are community-led housing projects subject to the community infrastructure levy, and what can they do about it?

What is the community infrastructure levy?

The community infrastructure levy, otherwise known as a CIL, is a financial levy which may be imposed by a local authority on new developments in its area.  The revenue generated by CIL is used by local authorities to deliver the infrastructure needed to support new developments, such as schools and transport improvements.

The levy is payable on development which creates new or additional internal area, where the gross internal area of new build is 100 square metres or more.  It is charged per square meter, and can mount up to tens of thousands of pounds on a new property.

Are community-led housing projects liable to pay CIL?

CIL only applies where a local authority has consulted on, approved and published a CIL charging schedule.  Although many local authorities have now done this, it is always worth checking in case it does not apply in your local authority area.  You can find your local authority here.

If your local authority has introduced a CIL regime, there is a chance that your community-led housing project may be liable to pay CIL.

What can you do?

Fortunately, there are a number of reliefs and exemptions available which community-led housing projects could take advantage of.

Community land trusts which are charitable may be able to take advantage of charitable relief, as long as the development is used ‘wholly, or mainly for charitable purposes’.  See here for more information.

Community-led housing projects that provide affordable housing may be eligible for social housing relief.  This applies to social/affordable rent and shared ownership.  You can read more information here.

Cohousing projects which are undertaking self-build should be able to take advantage of the self-build exemption.  This applies whether people build the property themselves, or commission the building of it.  For this relief to be relied on, an individual must live at the property for a minimum of three years after the work is completed.

There are strict time limits when applying for an exemption.  In particular, the self-build exemption must be claimed before starting development (including demolishing existing buildings) or else you will be liable to pay the full amount of the levy.

In our experience, it is worth finding out who is responsible for CIL at your local authority and talking the project through with them.  At my own cohousing project in Cumbria, the council officer has been incredibly helpful in guiding us through the process and forms which must be submitted.

Further information about the levy and the available reliefs and exemptions can be found in government guidance: Community Infrastructure Levy.