CIL relief and exemptions

The Community Infrastructure Levy Regulations (CIL) make a number of provisions for councils to give relief and exemptions from the levy. Some types of relief and exemptions are compulsory and set out in the CIL regulations, others are offered at our discretion.

We do not offer discretionary relief or exceptional circumstances relief for charitable and social housing relief.

Relief and exemptions available

The regulations provide possible relief and exemptions from CIL in the following circumstances:

• self-build developments - you can apply using form 7 part 1 and form 7 part 2
• residential annexes. - you can apply using form 8
• residential extensions over 100 square metre - you can apply using form 9
• social housing developments and charitable developments provided by a charity for charitable purposes - you can apply using form 10

These types of development are CIL liable but may be eligible for relief or exemption which must be applied for and granted in writing by us before commencement. Under government legislation, failure to gain approval for relief or an exemption prior to commencement will result in no relief or exemption being possible and the full CIL payment becoming payable. When a relief or an exemption has been granted it will be recorded on the local land charges register and will remain on there in case a disqualifying event takes place. Once the disqualifying event time period has elapsed it will be removed.

Reliefs

Discretionary

Whilst the regulations provide that most types of relief are compulsory; others are offered at the charging authority’s discretion. We have chosen not to offer relief for affordable housing types which do not meet the criteria required for mandatory social housing relief and are not regulated through the National Rent Regime. Neither do we offer discretionary relief for charitable development where the greater part of the chargeable development will be held as an investment, from which the profits are applied for charitable purposes.

Exceptional circumstances

The regulations provide that charging authorities may offer relief from the levy in exceptional circumstances where a specific scheme cannot afford to pay the levy. In July 2015, we undertook a study to consider the viability and deliverability of the Local Plan as a whole and assessed the viability of development allocations to inform the setting of CIL charging rates. The evidence concluded that the overall quantum of development planned in the borough could sustain a CIL charge without affecting the overall viability of development.

In light of the viability evidence, and given the very rare circumstances in which relevant criteria would be satisfied, we chose not to introduce an exceptional circumstances relief policy.

Social housing

100% social housing relief is available to those parts of development which are intended to be used as social housing. The claimant must own the relevant land and assume liability. Charitable private registered providers alongside other providers set out in regulation 49 will be eligible for this reduction as well as private registered providers as defined in the Housing and Regeneration Act 2008 as amended. Social housing relief may also be available to parties that are not charities. See further details on social housing relief.

Charitable

To qualify for any charitable relief, the following criteria must be fulfilled, the claimant must:

• be a charitable institution
• own a material interest in the relevant land and
• not own this interest jointly with a person who is not a charitable institution

Charitable relief will only apply to ‘charitable institutions’. This is defined in Regulation 41 as either a:

• charity defined as “any person or trust established for charitable purposes only” – for a definition of ‘charitable purposes’, see section 2 of the Charities Act 2011
• trust of which all the beneficiaries are charities or
• unit trust scheme in which all the unit holders are charities

More detailed information on charitable purposes can be found on the Charity Commission website.

In practice there are three main groups of charities which may benefit from relief:

• registered charities: charities which are registered with the Charity Commission
• exempt charities: charities which cannot register under the Charities Act 2011 and are not subject to the Charity Commission’s supervisory powers. They are listed in Schedule 3 of the 2011 Charities Act and include some educational institutions, and most universities and national museums
• excepted charities: charities excepted from the need to register but which are still supervised by the Charity Commission.

EU charities are treated in the same way as UK charities for the purposes of charitable relief, any decision on the eligibility of a non-UK charity must be made on the merit of the charitable purpose and will be at the discretion of the council.  The claiming exemption and relief form 10 requires the claimant to demonstrate what its charitable purposes are, for example through production of its constitution or articles of association.

Relief is not limited to only one charitable institution per development site. Where charitable relief conditions are met, every charitable institution owning a material interest in the relevant land can benefit from relief from their portion of the charge. The eligible development must be used ‘wholly, or mainly, for charitable purposes’ and meet the requirements of Regulation 43. There is no discretionary relief available where the greater part of the chargeable development will be held as an investment.

Exemptions

Self build

If you decide to build your own house and you will own a material interest in the house and you will occupy it as your principal residence for a minimum of three years after the work is completed, then you can apply for a self build exemption. You do not have to actually build the house but you do have to commission the work. To claim the exemption there are two forms which must be completed, one before commencement and one six months after completion. The CIL charge will be recorded on the land registry in case a disqualifying event takes place such as the house not being used by the applicant as their principal residence for the three years after completion.

Self build means all homes built or commissioned by individuals or groups of individuals for their own use community group self build projects will also qualify for the exemption where they meet the required criteria of owning a material interest, are part of the commissioning of the self build and will occupy the dwelling as their main or sole residence.

The exemption for self build is only applicable to whole new homes built, or commissioned by individuals for their own use. A conversion or change of use of an existing building to residential will not qualify for self build exemption.

Residential annex

A residential annex is CIL liable but you can apply for an exemption if you own a material interest in the house, that the annex will be associated with. You must live in the house as your sole or main residence and the annex must be located wholly within the land attached the house. There is no requirement for the occupier of the annex to be related to the owner of the main dwelling, or to commit to staying there for a specified period. Annex exemptions will be registered on the land registry for three years from completion in case of a disqualifying event taking place.

Residential annexes disqualifying events are the:

• main house is used for any purpose other than a single house
• annex is let
• sale of the house or annex unless they are sold at the same time to the same person.

Household extension

If your household extension has new floor space over 100 square metre it will be CIL liable. Development over this size, can be made exempt if you own a material interest in the house to be extended and you live in the house to be extended as your sole or main residence. There is no disqualifying event for a residential extension.

Relief is not automatically available, it must be applied for prior to commencement of development. There are strict processes to follow regarding exemptions and relief. For more information visit the relief and exemption pages on the planning portal.

For further information please contact us.

Disqualifying event

A disqualifying event is measured by a period in which the development ceases to qualify for a relief or exemption. If this occurs, for example if the chargeable development with a relief or exemption granted is sold within a certain period after the grant, then the full amount of CIL that should have been paid will become due and will be claimed back from the person who has signed the Assumption of Liability form 1. This process is often referred to as ‘clawback’. If a ‘disqualifying event’ defined in regulation 48 takes place, the relevant person must notify us within 14 days.

Clawback timescales