New Infrastructure Levy


A new Infrastructure Levy is to be brought in - date TBC.


Currently - Planning applications for development =

- subject to payments for infrastructure and affordable housing provision through S106 legal agreements or

- through Community Infrastructure Levy (CIL).


Currently - Permitted Development Rights (PDR) schemes with Prior Approval (PA) NOT SUBJECT TO s106 BUT can be subject to payments through the Community Infrastructure Levy.

- on the prior approval matters only.

- opportunities to argue against it.


Proposed - Remove S106 and remove CIL.


Proposed - Introduce the Infrastructure Levy.


What is the Infrastructure Levy (IL)?

“a nationally set value- based flat rate charge… set at a single or varied rate across England.”


Government’s method to capture developer contributions.


Pros = you will know the sums before you submit.


Concern = Land Value Capture.


Minister for Housing in June 2021 stated as part of current consultations the Government are:


“looking at whether PDR development could be part of the Infrastructure Levy.”


What does this mean for developers?


1. Planning applications for housing:

(i) Likely greater infrastructure contributions through the Infrastructure Levy required.

(ii) Likely lower threshold for provision of affordable housing in schemes.


2. Permitted Development/ Prior Approval route for housing:

(i) Could be subject to financial payment through the Infrastructure Levy.

(ii) Likely to bring in a requirement for PDR schemes to provide affordable homes.


When will this be brought in?


In June 2021- the Minister for Housing advised we:


“…. would not have to wait too long to hear the proposals.”


What does this mean?


Planning applications or Prior Approval that are in /awaiting determination- likely to be transitional arrangements.


New applications or Prior Approval submissions - subject to the IL.


Costs are unknown - consider when purchasing buildings/land

(i) Future proofing contracts/clauses (ie if the IL then makes a scheme unviable).

(ii) Allow a 10% (at least) contingency (of the costs) for IL .


Act now - move schemes forward as soon as possible!

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