From 1 April 2012, new buildings and developments in the Greater London area may be liable for payment of the Mayor’s Community Infrastructure Levy (CIL). The Mayor is hoping to raise £300 million from Mayoral CIL contributions to fund the delivery of Crossrail.
How does the Mayor’s CIL work?
The 2008 Planning Act gave local authorities the ability to charge a CIL. A CIL is a charge on a new building above 100 square meters of gross internal space which is supposed to help fund local and sub regional infrastructure. It is paid by developers or owners of the land being developed.
Under the legislation the Mayor has the ability to impose a CIL across the whole of the Greater London Area. The Mayor has elected to use this discretionary power and on 29 February 2012, the Mayor’s charging schedule was approved.
Under the Mayor’s charging schedule, London has been divided into 3 zones. Each zone has an individual charging rate. The charging rate given is per square meter of the development and the payment due is worked out by a formula based on the size and character of the development.
Any exceptions or exemptions?
If your development is for the provision of healthcare services or education services then you’ll be charged at a nil rate.
Social housing projects and charities also benefit from general discounts provided for in the Community Infrastructure Levy Regulations 2010.
What else might I be paying?
All local authorities have the discretion to charge a CIL. This means that if your development is in an area where the local authorities have also elected to impose a CIL, you’ll effectively be paying 2 CILs. Furthermore, the authorities do not have to charge the same amount which means that CIL payments could vary from area to area.
What impact will the Mayor’s CIL have?
Prior to the approval of the Mayor’s charging schedule, a number of local authorities expressed concern at the impact the Mayor’s CIL would have on development in their areas. Many are concerned that the Mayor’s CIL will prove a disincentive for developers and will also impact on the viability of affordable housing projects. The London councils have also expressed fear that if the Mayor’s CIL is too costly for developers, there will be less money available for local infrastructure support.
You can find further information on the Mayor’s CIL here.