Mayor's Community Infrastructure Levy
The Mayor of London’s Community Infrastructure Levy (CIL) came into effect on 1st April 2012. The Mayor’s CIL will be applied to new development and extensions across Greater London and the levy will be collected by the Boroughs once development commences. The Levy will also apply to planning applications submitted but not determined before 1st April 2012.
The introduction of the new CIL charging regime is likely to be viewed as an unwelcome but seemingly necessary additional cost burden to the development industry, just at a time when it is struggling to recover and emerge from recession. It is likely to be applied rigidly as a ‘tax’ on most forms of development across London, with only limited exceptions.
A charging regime based on a simple and clear methodology and which is straightforward to operate are laudable aims for the new CIL and the Examination Inspector concluded that the proposed Levy strikes a reasonable balance between “complexity and fairness”. However, there is understandable concern that the broad brush approach used to devise the Charging Schedule (which is based only on residential values) fails to recognise the wide variations in development viability by type of use and by geographical location within Boroughs and across London. For example, the CIL charge to be applied to a residential scheme in a high value area is likely to be more easily absorbed than the CIL payable for a large scale warehousing scheme in a low value area, to the extent that it may render some of these schemes marginal or unviable. The impact of the CIL will vary considerably and this is likely to become evident as the new charging regime is applied over the coming months.
For more information regarding the Mayor's CIL, please refer to the attached file: