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The Community Infrastructure Levy and what it means for self-builders and barn conversions

Community Infrastructure Levy Barns

A piece of legislation has recently been adopted by South Northamptonshire and South Oxfordshire district councils affecting certain developments that have been granted planning permission on or after the 1st April 2016.  This is a charge called the Community Infrastructure Levy (CIL) which applies to new residential and retail developments. Most other councils will also soon be starting to apply this charge.

The Community Infrastructure Levy (CIL)

The Community Infrastructure Levy (CIL) is a charge that local authorities in England and Wales can choose to place on new developments, usually those with over 100m2 of floorspace, or that create one or more new dwellings.

Please note; this charge only applies if you are creating new-build floor space such as a new-build dwelling or a large home extension (over 100m2). This can also be a mezzanine level in a barn conversion. The CIL charge will apply to the new build floor space only (so the area of the mezzanine or extension) and not to any existing floor area.

Please also note, if you are a self-builder (i.e. you will be living in your new home for at least 3 years or it is an extension to your own home that you will be living in for at least 3 years) then you can apply for exemption to the levy.

The levy came into force in 2010 (but councils have been very slow to implement it, with many still not implementing the charge in 2017) and coincides with restrictions on the use of planning obligations such as Section 106 agreements.  A CIL enables the local authority to raise more money for local infrastructure improvements than Section 106 obligations. It also provides developers more certainty about costs, as it is a fixed charge.

Section 106 agreements and CIL

The CIL regulations can be complex. However, it is important to consider how it may affect you if intending to convert an existing barn or build/extend a new residential property in the future.

How might the CIL affect a barn conversion?

The good news is that changes of use, such as the conversion of a barn into a dwelling, do not usually attract the CIL for two reasons.  Firstly, a barn conversion does not usually involve creating 100m2 or more of new floorspace.  Secondly, floorspace that has been in legal use for a continuous period of at least six months within the 12 months preceding the granting of planning permission is disregarded when calculating CIL (See Section 40 of the Community Infrastructure Levy Regulations).

Section 40 of the CIL Regulations

But, you might be liable for CIL if your barn conversion involves creating additional new-build floorspace (e.g a mezzanine or extension to the barn). Here the levy would only apply to the additional floor area, not the total building area.

How might the CIL affect self-builds/extensions?

A government initiative to stimulate the self-build market means that a development can also be exempt from the CIL if it is a self-build/extension project.

There are three types of self-build exemptions; for a whole property, for a residential annexe and for a residential extension.

  1. Whole Property

Those claiming exemption must own the property and use it as their primary residence for a minimum of three years post-completion. If the self-builder sells or rents their property within this period, they will be charged the full levy of their area.

  1. Residential extension

If certain criteria are met (see regulations 42A and 42B), then a self-builder will be exempt from paying the levy for extensions. For example; the main house must be the self-builder’s primary residence and only if the proposed extension enlarges the primary residence i.e. it is not an additional unit. Extensions less than 100m2 are already exempt according to the minor development exemption.

Regulations 42A and 42B

In both cases it is important that the correct procedure is followed in order to receive a notice of exemption; including not starting works before this is received. It is important to note that even if these types of projects do not require planning permission, the CIL will still be charged unless exemption applies.

Ultimately, the landowner is responsible for seeking CIL exemption, or, is liable for paying the levy within 60 days of commencement of the works. CIL payments are usually made in cash, but can also be paid “in kind”, for example through land.

CIL charges

Both councils use Charging Zones to determine the CIL cost, and have produced corresponding maps. In South Northants there are three main categories for charges; rural, urban and Sustainable Urban Extensions (SUEs) which range between £50/m2- £200/m2. In South Oxfordshire residential development can be liable for a charge of up to £150/m2. Both councils have produced Charging Schedules that set out the charges and answer FAQs.

South Northants CIL Information

South Northants CIL Charging Schedule

South Oxon CIL Information

South Oxon CIL Charging Schedule

 

October 5, 2016
The Community Infrastructure Levy and what it means for self-builders and barn conversions