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Community Infrastructure Levy (CIL) ‘could hold back property development’ says LSH

wantspacegotspace.co.uk - Community Infrastructure Levy (CIL) ‘could hold back property development’  says LSHThe changes to the tariff obligations of the Community Infrastructure Levy (CIL) are complicated and confusing for developers and need to be carefully considered before embarking on any development options, according to national commercial property consultancy Lambert Smith Hampton (LSH).
 
Steve Hemming, director of planning and development consultancy at LSH’s Birmingham office, said: “CIL is intended to be fairer, faster and more transparent than the existing Section 106 (S106) tariff obligations, yet so far this remains to be seen.”
 
The main differences between CIL and S106:
•       CIL revenues may be used by the local authority to fund a range of related or unrelated infrastructure projects, whereas S106 is levied to fund development-specific projects.
•       CIL Levy is charged per additional sq m and is non-negotiable, whereas S106 obligations are a matter for negotiation between the developer and local authority.
•       CIL examiners are responsible for ensuring the charging schedule has been fully substantiated under the CIL regulations.
•       CIL payments can be made in later stages of the project, unlike S106 which must be paid all in advance of development commencement.
•       A developer may not challenge the use to which CIL funds are put, unlike S106.
 
Steve added: “With CIL being charged at different rates depending on the Charging Areas, it is not surprising that few understand the impact it will have on the financial viability of a project.

Developers considering embarking upon a project within a CIL-approved area would be well-advised to take the time to understand the impact on their financial appraisals.”  

Posted by The Editor (wantspacegotspace) on 23rd September 2013

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