Housing - New Build: CIL Tax - Not for self builders?

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- CommentAuthorTriassic
- CommentTimeFeb 5th 2013 edited
The Community Infrastructure Levy (CIL) has prompted much debate over how it should be instilled, and even its validity, for some who want to embrace self building.

Now, a Labour MP has called on the Government to think again about how CIL payments of up to Â£35,000 could hinder those wish to build a home of their own.

John Mann, the Member of Parliament for Bassetlaw in Nottinghamshire states, in his Early Day Motion, that 'people are already abandoning plans to build a house because of these new taxes'.

The motion calls for a limit to be set for exemption from the taxes, to include one-off homes and, potentially some of the smaller collaborative projects, which will 'give a boost to the aspiration of people and the small businesses who lose out the most from these unfair taxes'. The motion has been signed by eight MPs, so far.

http://www.selfbuildportal.org.uk/latest-news/152-call-for-cil-exemption-for-self-builders

Maybe we should be lobying our local MP to support this motion?
- CommentAuthorHalcyonRichard
- CommentTimeFeb 5th 2013
Should we have CIL at all ? After all it will discourage all sizes of housing development and in the end it will be the house buyer who indirectly pays it.

I suggest we replace it with BIF - Baby Infractructure Levy. We wouldn't need to build any houses then.

Richard
- CommentAuthorFred56
- CommentTimeFeb 5th 2013
There already area infrastructure charges built into water and electricity connections and existing S106 and community open space/village halls charges.
Surely the aim should be to get some of the profit away form the landowners and redirect it into the public purse. Right now the biggest beneficiaries of new development are the landowners that happened to be inside the development line drawn by the local planning department. They gain a massive uplift in land value just be the line drawn on the local development framework document. This inflated land value is the primary driver of inflated housing costs. Some states tax the landowner at the point development status is granted. Perhaps we could change to that model. It gets the tax in the right place in the whole series of transactions.

Given long enough CIL ought to filter through the system and suppress land prices but there will be a lengthy period of readjustment and some real pain for anyone who has bought a plot they have not developed. I am anticipating that Local authorities will apply the tax at the point of completion rather than the issue of consent. That's what our local authority did with C4SH code levels.
- CommentAuthorPeter_in_Hungary
- CommentTimeFeb 5th 2013 edited
Posted By: Fred56Right now the biggest beneficiaries of new development are the landowners that happened to be inside the development line drawn by the local planning department.

Yes
Posted By: Fred56They gain a massive uplift in land value just be the line drawn on the local development framework document.

Yes
Posted By: Fred56This inflated land value is the primary driver of inflated housing costs.

Yes, but IMO the fix is to change the planning process to allow building residential building on, say, low grade agricultural land with perhaps some rules about minimum size to avoid crowding and any other measures you can think of that take away the fact of PP akin to wining the lottery
IMO the UK planning process is broken and not fit for purpose.
- CommentAuthorHalcyonRichard
- CommentTimeFeb 5th 2013
Hi,
The inflated land value is most likely due to the population increase and the planning system. Britain is one of the most population dense countries in the world. And the population is increasing all the time.

Richard
- CommentAuthorfostertom
- CommentTimeFeb 5th 2013 edited
Posted By: Peter_in_Hungarythe fix is to change the planning process to allow building residential building on, say, low grade agricultural land
Oh come on, you mean remove the rarity-created value windfall by simply removing the restraint that creates the rarity?

If there's one single reason to be grateful for the UK Planning system, it's that we have built up areas and still open space between (which is a miracle in this island of v many densely populated bits) instead of uniform low/medium density sprawl. Look at many parts of the world to see what that's like.

It's so obvious, to accept the rarity created by social restraint, and to tax for society the value that that creates. Two major attempts to install that since WW2 have failed due to the strength of capitalist ideology and middle England voters' self interest.

There's no possiblity of relaxing restraint so much thatb there's no rarity - antwhere in tye world, let alone crowded (and still beautiful) UK.

The planning system is something we should all be grateful for, for all its annoying detail and practice. A miraculous triumph of practical conviviality over dogma. Dismantle it, and regret at leisure.
- CommentAuthorSteamyTea
- CommentTimeFeb 5th 2013
Posted By: fostertomThe planning system is something we should all be grateful for, for all its annoying detail and practice. A miraculous triumph of practical conviviality over dogma. Dismantle it, and regret at leisure.
Should we also be grateful that banks overlent on rare properties and then had to be bailed out by the government, or us in other words. Should we also be proud that property wealth has clustered around the over 50's disenfranchise the young, should we also be worried that there is lots of land that is suitable for building on but we still build in flood planes. Are we happy to have high density housing only.

Our planning system works us all, not fit for purpose.

http://www.telegraph.co.uk/earth/hands-off-our-land/9848818/Greenbelt-land-not-absolutely-brilliant-should-be-used-for-development-says-minister.html
- CommentAuthorfostertom
- CommentTimeFeb 5th 2013
Posted By: SteamyTeaShould we also be grateful that banks overlent on rare properties and then had to be bailed out by the government, or us in other words
No - strange thought!
Posted By: SteamyTeaShould we also be proud that property wealth has clustered around the over 50's disenfranchise the young
No
Posted By: SteamyTeashould we also be worried that there is lots of land that is suitable for building on but we still build in flood planes
Yes
Posted By: SteamyTeaAre we happy to have high density housing only
We don't.

This proves ....?
- CommentAuthorSteamyTea
- CommentTimeFeb 5th 2013
That the planning system is not about building places that people want to live in but about putting barriers that stop homes being built.
- CommentAuthorfostertom
- CommentTimeFeb 5th 2013
Can't blame the Planning system for capitalism and crude private self interest. Remove it and everything would be lovely?
- CommentAuthorTriassic
- CommentTimeFeb 6th 2013
Personally I think planning controls are necessary, but the rules have to be applied in a consistant manner across England and Wales.

If the government wants to encourage self build maybe the CIL tax should be waved?

One worry is that if the EU gets its way and applied a 20% VAT rate to new build things will only get worse!

THE European Union has issued a consultation document that could lead to VAT being charged on all new homes in the UK â€“ a move that would see the average price of a new home increase by Â£48,000 from Â£238,000 to Â£286,000.

The consultation, which required replies to be lodged by January 4, 2013, proposes to harmonise rates across Europe.

Currently, the UK has an exemption which means that new homes and self-builds are zero-rated for VAT purposes.

Read more: Examiner http://www.examiner.co.uk/business/business-columnists/2013/01/08/martin-thompson-of-armitage-sykes-on-european-union-plans-for-vat-on-all-new-homes-86081-32562164/#ixzz2K6i5roUz
- CommentAuthorRobinB
- CommentTimeFeb 6th 2013
Posted By: fostertomIf there's one single reason to be grateful for the UK Planning system, it's that we have built up areas and still open space between (which is a miracle in this island of v many densely populated bits) instead of uniform low/medium density sprawl. Look at many parts of the world to see what that's like.

Agree wholeheartedly. And it's not something that can be tinkered with and "put back" if it doesn't work. From what I understand it's the land banks held by UK plc that cause the worse shortage of places to build. I also disagree that the big builders need greenfield sites to house us all. It's just more profitable than building on brownfield. What if there was some sort of time limit for holding building land and not completing a building on it? Or perhaps that would have a worse effect with small or individual builders ceding their land to the big guys when they couldn't complete on time.
This from back in 2007 "Tesco owns enough land for another 175 superstores" not sure if it's still the case.
http://www.guardian.co.uk/business/2007/jan/14/retail.observerbusiness
- CommentAuthorTriassic
- CommentTimeFeb 6th 2013
Posted By: RobinBI also disagree that the big builders need greenfield sites to house us all. It's just more profitable than building on brownfield.

According to this http://fullfact.org/factchecks/green_belt_enough_brownfield_land_million_new_homes-28009

There is 31,160 hectares of brownfield land available, on which we could build around 1.5 million homes. Rather than a CIL Tax maybe we should remove cost barriers to building on such land or even provide tax incentives ?
- CommentAuthorSteamyTea
- CommentTimeFeb 6th 2013
Trouble with planning is that it takes creativity away and pushes up house prices. I read somewhere a while back that Texas did not suffer the property price slump because it had very limited planning restrictions.

With today's planning controls will you ever get a new St.Ives (Cornwall not Cambs), a Bourton-on-the-Water, Salisbury, Harrogate or would you end up with Basildon, Plymouth or Milton Keynes.

It is not an either or, brownfield or greenfield, both are needed, but we are building horrendously small and badly designed houses on inappropriate land. Trouble is I don't think we can see a way out of it without more restrictions, which means more cost. But then we have forgotten what a house is for.
- CommentAuthorfostertom
- CommentTimeFeb 6th 2013
Posted By: SteamyTeaTexas did not suffer the property price slump because it had very limited planning restrictions
and it's become a visual and environmental disaster. Despite the supposedly limitless space (which makes it totally n/a to the UK case) which is sooo Texan, isn't it, there's exponentially spreading regions where that pristine spaciousness is no more, instead scattered signs of western/human invasion mostly ugly/utilitarian - if not great swathes of housing with sprinklered lawns in the desert.
- CommentAuthorfostertom
- CommentTimeFeb 6th 2013 edited
Posted By: SteamyTeawill you ever get a new St.Ives (Cornwall not Cambs), a Bourton-on-the-Water
Poundbury?
Posted By: SteamyTeaTrouble with planning is that it takes creativity away
Posted By: SteamyTeaMilton Keynes
started off very well indeed - it really was something - but the vision got diluted and diluted by ... guess what ... 'market forces' as cover for a big-housebuilders' bonanza. MK was a fine example of negligible local land shortage - look what happened with collapse of vision-based control. Endless housing, endless driving, with only a nod to all the rest that was meant to make new-version working neighbourhoods - walk-to-work employment, shops, schools, public facilities. MK was a big disappointment, betrayal, but Tory-bankrolling housebuilders did v well out of it.

Poundbury was another attempt, by Charlie, to use his clout to build working neighbourhoods but was thoughtlessly underminded by cheap populism - that means you and me.
- CommentAuthorSteamyTea
- CommentTimeFeb 6th 2013
I used to work in MK, lived in Wolverton when I was there. Great place to work, easy shopping but lacking any soul. Now Soulbury, which is going to be gobbled up by MK is a lovely little place.

So planing needs consistent and appropriate vision, how is that achievable in a dynamic market place.

I have been to Poundbury, tried to like it, but it just seemed so miserable, even the alga on the buildings was a pale green heading towards grey.
Where I agree that you cannot do anything about cheap populism via the planning office or a vision, places that are free to develop willy nilly now attract the kind of people that promote a town. Or the wealthy.

So planning seems to encourage low income ghettos while a free for all seems to have developed a more affluent society. I don't think that many people in Morton-on-the-Marsh made their money in Southall or Peckham and moved out there.
Allow more villages to be developed I say rather than more ghettos.
- CommentAuthordjh
- CommentTimeFeb 6th 2013
Posted By: Fred56There already area infrastructure charges built into water and electricity connections and existing S106 and community open space/village halls charges.

Right, but CIL replaces S106, you don't get charged both.

Given long enough CIL ought to filter through the system and suppress land prices but there will be a lengthy period of readjustment and some real pain for anyone who has bought a plot they have not developed. I am anticipating that Local authorities will apply the tax at the point of completion rather than the issue of consent. That's what our local authority did with C4SH code levels.

No, they will charge it when permission is granted, similar to S106. It's illegal to apply otherwise, AFAIK.
- CommentAuthordjh
- CommentTimeFeb 6th 2013
Oh, by the way:

Top Myths

1. The CIL regulations are simple and understood by everyone
- This is clearly not true particularly when you see the responses to the schedule consultation
2. Local Authority services will have clear infrastructure plans to support your funding gap
3. CIL will pay for all of your infrastructure

from the government's own website!

http://www.pas.gov.uk/pas/core/page.do?pageId=1252937
- CommentAuthormatt-2052
- CommentTimeFeb 15th 2013
It is not just the CIL- in Shropshire self builders have to pay an Affordable Housing contribution as well!
A 100m2 house is currently charged Â£11 700

plus CIL at:

"Â£40 per square metre of new residential development in Shrewsbury, the market towns and key centres or Â£80 per square metre of new residential development elsewhere"
- CommentAuthorSteamyTea
- CommentTimeFeb 15th 2013
Shropshire can't need a larger revenue stream then, you must all be overpaying on your council tax.

Is that right, Â£51,700 to build a 100m^2, that must be about double the build cost.
- CommentAuthormatt-2052
- CommentTimeFeb 15th 2013
Think it would be Â£11700 + 8000
so Â£19700 before anything else is taken into consideration. Have heard that they are applying it to garages as well.
- CommentAuthorSimon Still
- CommentTimeFeb 15th 2013
<blockquote><cite>Posted By: djh</cite>
No, they will charge it when permission is granted, similar to S106. It's illegal to apply otherwise, AFAIK.</blockquote>

No, charged when building commences. One of the problems with CIL - it effectively falls on the builder not the person who has received the benefit of the planning gain.

http://www.lambeth.gov.uk/Services/HousingPlanning/Planning/CommunityInfrastructureLevy.htm

London Mayor's CIL levy of Â£35 pSqM 'to pay for crossrail'. Not considered relevant that Crossrail doesn't even come through the borough.....
- CommentAuthordjh
- CommentTimeFeb 19th 2013
Posted By: Simon Still
Posted By: djh
No, they will charge it when permission is granted, similar to S106. It's illegal to apply otherwise, AFAIK.

No, charged when building commences. One of the problems with CIL - it effectively falls on the builder not the person who has received the benefit of the planning gain.

Sorry, you're right. My answer was to clear up that it is not on completion, but at the start. But I still think it is the same as S106 - the agreement comes into force when permission is granted and payment is made when development starts. When you buy a plot, you are aware of the future liability and need to adjust the price you pay to reflect it. I don't think CIL makes things any worse, except that it often seems to be for a h*ll of a lot more money!
- CommentAuthorEd Davies
- CommentTimeFeb 8th 2014
Looks like a useful summary of the schedule:

http://zerocarbonbods.blogspot.co.uk/2014/02/community-infrastructure-levy-or-not.html
- CommentAuthorferdinand2000
- CommentTimeFeb 9th 2014 edited
I thought it might be useful to cross-post my CiL reference piece from a few days ago on this thread.

My favourite source for keeping up to date with Community Infrastructure Levy is the RTPI's Planning Resource CIL Watch blog.

Go here and register (free) on the site:
http://users.planningresource.co.uk/register/basic/

Then go for the CIL option in the menu. I believe you get access to CiLWatch and some articles free without a paid subscription.

They have tracked various issues including the Shropshire Barnstorm and the Great Collapsing Rutland Self-Build Deterrence Strategy.

You can also subscribe to a specific CiL newsletter.

Preview:
http://www.planningresource.co.uk/cil-watch-bulletin

Subscribe (after site registration):
http://www.planningresource.co.uk/email-bulletins

There is an RSS Feed which tells you about their recent articles. It should format OK in most web browsers (eg Firefox).
http://www.planningresource.co.uk/rss/cil-and-finance

Useful map of CiL:
http://tinyurl.com/oeu8ern

Finally and if all else fails, the RTPI are such nice people that the entire site seems to be stored in the Google Cache anyway. I just have to type "cache:" in front of the web address, and it gives me the cached version, because I use the Google Chrome web browser.

Ferdinand
- CommentAuthorCWatters
- CommentTimeFeb 9th 2014
I think it's amazing how little press coverage there is on the CIL. Imagine if someone in government proposed adding VAT on new Houses.
- CommentAuthordjh
- CommentTimeFeb 10th 2014
Posted By: CWattersI think it's amazing how little press coverage there is on the CIL. Imagine if someone in government proposed adding VAT on new Houses.

I think there'd be more fuss about VAT because it is a visible item on the bill, but I don't think there'd be a huge fuss because not that many people buy new houses. Might be more fuss about the advantage it gave to buy-to-let and corporate purchasers.
- CommentAuthorTriassic
- CommentTimeFeb 10th 2014
Has something happen regarding CIL for self builders? I thought it was dead?
- CommentAuthorJoiner
- CommentTimeFeb 10th 2014
For the record...

https://shropshire.gov.uk/planningpolicy.nsf/open/8E41399C53C8A888802579350047DE62

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Housing - New Build: CIL Tax - Not for self builders?