Community Infrastructure Levy - new reliefs

In the final version of the CIL regulations, there are 2 new reliefs, both of which were trailed in the earlier consultation and which have been the subject of much discussion over recent months. The first is "social housing relief" and the second is "relief for execptional circumstances"

Social housing relief is to be available for the social housing element of chargeable development. The regulations set out how this is to be calculated but, importantly, a person wishing to claim this relief must satisfy 2 tests; 1) the claimant must be an owner of the land which has the benefit of the planning permission and 2) that person must assume liability to pay the whole CIL liability for the development which is permitted by the planning permission. An application for relief must be submitted before commencement of the development - and the claimant must wait for the authority to notify its decision on the claim before commencing, otherwise the claim lapses (as is the case with charitable relief).

I am not quite sure how in practice this is to work for phased development - where you may not even be able to fill in the claim form for the housing phase when you are looking to start on a different phase. As I flagged up yesterday in relation to the way in which an outline planning permission must be structured in order to achieve phased payment of CIL, the same issue arises for claiming social housing relief. You must ensure  your planning permission is correctly worded.

Unlike social housing relief, the relief for exceptional circumstances, where an authority makes it available in its area, is discretionary - because it will depend on satisfying the authority 1) that there are exceptional circumstances justifying relief and 2) that it is expedient for relief to be granted. The idea behind this relief is apparently to meet the concerns that some developments would be rendered unviable by CIL and whereas the potential effects of CIL on viability across the area is relevant in the setting of rates, the concerns have been that this does not go far enough where particular sites/developments have particular issues and will be unviable if CIL is to be paid.

This relief may only be granted where there is already a section 106 obligation in respect of the relevant development and the authority considers that the cost of complying with the 106 is greater than CIL and that to require CIL would have an unacceptable impact on viability. What I cannot work out is why the section 106 is relevant here? if the 106 (and therefore the relevant permission) are pre -CIL, then under the transitional provisions, CIL does not apply. If the permission has been granted post CIL, we should assume that any 106 is for matters which are not covered by CIL, so that CIL is indeed an additional burden - but why then does the 106 have to cost more than CIL?

Note that you cannot claim for this relief as well as social housing or charitable relief.  

Comments

[Rebecca Carriage]

I wonder whether the exceptional circumstances relief was thought of before the transitional provisions for s 106 agreements? So it might have been an earlier form of "transitional relief" before the decision was taken just to exempt pre-CIL sites?

[beverley firth]

Yes thats a good point and could be correct. It would explain the apparent muddle.