Section 106 Agreements (TCPA 1990 s.106) · Condition on Planning Permission · Affordable Housing (20-40%; On-Site or In-Lieu) · CIL (Fixed Per-sqm Levy; Cannot Duplicate with s.106) · Three-Test Rule (Necessary; Related; Proportionate) · Viability Assessment (Residual Land Value; NPPF Para 57) · Binds Successors (Local Land Charge) · Modification/Discharge: s.106A After 5 Years · Scotland: s.75 Agreements

Section 106 Planning Obligations — Affordable Housing, CIL, Viability Assessments, Successors in Title and Scotland Section 75

Section 106 planning obligations are legally binding agreements between a local planning authority (LPA) and a developer or landowner as a condition of granting planning permission. They are used to make development acceptable where it would otherwise fail planning policy — typically by requiring affordable housing contributions or infrastructure payments. The affordable housing obligation (20-40% of new residential units above the site threshold, typically 10+ units in urban areas) is the most financially significant. CIL (Community Infrastructure Levy — Planning Act 2008) is a separate fixed levy charged per square metre of new floorspace that cannot duplicate s.106 infrastructure funding (CIL Regulation 122). Every s.106 obligation must pass three tests: necessary; directly related to the development; fairly and reasonably proportionate in scale. Viability assessments (residual land value calculation — NPPF para 57) allow developers to challenge unviable s.106 requirements. s.106 obligations bind all successors in title (registered as local land charges — discoverable on LLC1/CON29). Modification or discharge after 5 years under s.106A (TCPA 1990); appeal to Planning Inspectorate. Scotland: s.75 agreements under TCPA(Scotland) 1997; same principles; CIL not introduced in Scotland.

12 min readUpdated 7 June 2026Last reviewed: 17 May 2026planningsection-106affordable-housingCIL

What section 106 obligations can require — affordable housing and infrastructure

Under TCPA 1990 s.106, a planning obligation can restrict land use, require specified operations or activities, require land to be used in a specified way, or require payments to the LPA. The affordable housing obligation is the most financially significant: LPAs require 20-40% of new residential units to be affordable (affordable rent; shared ownership; First Homes), triggered above a minimum site threshold (typically 10+ units urban, 5+ rural). Delivery is either on-site (to a Registered Provider at practical completion) or as a financial contribution in lieu. Infrastructure obligations commonly include education, highways, open space, ecological mitigation (biodiversity net gain — Environment Act 2021), healthcare, and transport contributions.

CIL (Community Infrastructure Levy) — fixed levy, Regulation 122 and Scotland

CIL (Planning Act 2008; CIL Regulations 2010) is a separate fixed levy charged per square metre of net new floorspace at a rate set in the LPA's CIL Charging Schedule — it is not negotiated. CIL Regulation 122: s.106 obligations cannot duplicate CIL-funded infrastructure. CIL reliefs: social housing relief; charitable relief; self-build exemption. Not all LPAs have adopted a CIL Charging Schedule — where no CIL applies, LPAs rely more heavily on s.106. Scotland: CIL has not been introduced in Scotland; s.75 agreements (TCPA(Scotland) 1997 s.75) are the equivalent planning obligation mechanism.

Viability assessments, binding on successors and modification

Where cumulative s.106 obligations make development financially unviable (residual land value falls below the benchmark land value), the developer can commission a viability assessment to challenge the requirements — NPPF (2021) para 57 requires LPAs to consider viability. Every s.106 obligation is registered as a local land charge (Local Land Charges Act 1975), discoverable on LLC1/CON29 local authority searches — all successors in title are bound. Modification/discharge under s.106A TCPA 1990 is available after 5 years; LPA has 8 weeks to decide; appeal to Planning Inspectorate if refused. Scotland: s.75A TCPA(Scotland) 1997 governs modification and discharge.

Frequently asked questions

What is a section 106 agreement and when is it required?+

A section 106 agreement (under the Town and Country Planning Act 1990) is a legally binding planning obligation between a local planning authority (LPA) and a developer or landowner as a condition of granting planning permission. It is required where the development would be unacceptable in planning terms without mitigation — typically where affordable housing is required (above the local threshold, usually 10+ units) or where the development imposes costs on local infrastructure (schools; roads; healthcare; open space). Section 106 obligations bind the land and all successors in title — including purchasers of the development.

What is the three-test rule for section 106 obligations?+

CIL Regulation 122 provides that a planning obligation can only be required by an LPA as a condition of planning permission if it passes three tests: (1) necessary to make the development acceptable in planning terms; (2) directly related to the development — must address a specific impact of the development; and (3) fairly and reasonably related in scale and kind to the development — the amount must be proportionate. A s.106 obligation that fails any of these three tests is unenforceable.

Can a section 106 obligation be modified or removed after it has been agreed?+

Yes — under s.106A TCPA 1990, the applicant can apply to the LPA to modify or discharge a s.106 obligation after 5 years from the date of the obligation. The LPA has 8 weeks to decide (or 12 weeks by agreement). If the LPA refuses, the applicant can appeal to the Planning Inspectorate. In Scotland, modification and discharge of s.75 planning obligations is governed by s.75A of the TCPA(Scotland) 1997.

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