Community Infrastructure Levy UK 2026 — CIL Rates, Self-Build Exemption (3-Year Clawback), MCIL London, Social Housing Relief and CIL vs Section 106 Planning Obligations

CIL rates, what is chargeable, MCIL, self-build exemption (3-year clawback), social housing relief and CIL vs Section 106

The complete CIL framework for landlords and property developers:

• CIL rates, what is chargeable, net GIA calculation, MCIL and exemptions for minor development: WHAT IS CHARGEABLE: CIL is charged on development that: (a) creates net new Gross Internal Area (GIA) exceeding 100 sqm; OR (b) involves the creation of a new dwelling (of any size — even a studio flat below 100 sqm); the threshold of 100 sqm GIA applies to non-residential development and extensions; for new dwellings, any new dwelling is chargeable regardless of size. NET GIA CALCULATION: the CIL liability is calculated on the NET new GIA — the gross new GIA of the proposed development MINUS the existing lawful GIA of any building on the site that is being demolished or converted (the 'in-use floor space credit'); this means: (a) converting a commercial building to residential — the existing commercial GIA (if the building was in lawful use in the 3 years before planning permission was granted) is deducted from the gross new residential GIA, and CIL is only charged on the difference; (b) demolishing and rebuilding — the demolished building's GIA is deducted from the new building's GIA. CIL RATES: each LPA that has adopted a CIL Charging Schedule sets its own rates per sqm (differentiated by development type: residential; retail; office/commercial; industrial; hotel; and sometimes by geographic zone within the LPA reflecting different land values); rates range from £0/sqm (many LPAs outside major urban areas have a zero residential rate or have not adopted a CIL Charging Schedule at all) to £500+/sqm in high-value areas; check the LPA's current Charging Schedule (available on the LPA's website or via the Planning Portal); EXAMPLES: a 150 sqm extension to a house (net new GIA 150 sqm) in an LPA with a £200/sqm residential rate = £30,000 CIL liability; a 10-flat new-build development (10 × 75 sqm = 750 sqm net new GIA) in an LPA with £150/sqm residential rate = £112,500 CIL liability. MCIL (MAYORAL CIL — LONDON): the GLA charges MCIL 2 (from 1 April 2019) on top of LPA CIL for development in Greater London: RESIDENTIAL — £25/sqm (£80/sqm in the Central Activity Zone (CAZ) and Isle of Dogs — the highest-value central London areas); OFFICES; HOTELS; RETAIL AND OTHER — £60/sqm; MCIL is charged in addition to the LPA's own CIL (e.g., a residential development in Hackney: Hackney LPA CIL rate + MCIL £25/sqm = total CIL per sqm); the LPA collects MCIL on behalf of the GLA and remits it to the GLA for Crossrail 2 and TfL strategic infrastructure. NOT CHARGEABLE: internal alterations with no new GIA; changes of use without any new floorspace; development commenced before the LPA's Charging Schedule came into force (subject to transitional provisions); development that is entirely exempt under the CIL Regulations.
• Self-build exemption (claim before commencement — 3-year clawback), social housing relief, charitable relief, CIL demand notice, surcharges, enforcement and CIL vs Section 106: SELF-BUILD EXEMPTION (CIL REGULATIONS 2010 Reg 54B-54D): a single dwelling built for the applicant's own use that will be their only or main primary residence is exempt from CIL. ELIGIBILITY: the applicant must: (a) be the individual (not a company or trust) who is building the dwelling for their own occupation; (b) intend to use the dwelling as their only or main residence; (c) assume liability for CIL (submit HMLR-equivalent CIL Form 1 — Assumption of Liability — to the LPA before development commences). TIMING — CLAIM MUST BE MADE BEFORE COMMENCEMENT: the self-build exemption claim must be submitted to the LPA (typically using the Planning Portal or the LPA's online CIL service) BEFORE any development commences; if the claim is submitted after development has commenced (even by one day), the exemption is permanently lost — the full CIL liability crystallises and must be paid immediately (plus surcharges for late commencement notice filing). THREE-YEAR CLAWBACK: after completing the dwelling, the applicant must occupy it as their only or main residence for a minimum of 3 years; the LPA will register a CIL clawback charge on the Land Registry; if the dwelling is sold; let; converted; or ceases to be the applicant's only or main residence within 3 years of first occupation, the exemption is clawed back — the FULL CIL amount (that would have been payable without the exemption) plus a 20% surcharge becomes immediately payable to the LPA; WHAT IS NOT COVERED: the self-build exemption does NOT apply to: (a) investment BTL properties built for rental income; (b) properties built for onward sale; (c) company or trust-owned developments (the applicant must be an individual); (d) conversions of existing properties to residential (where the applicant is not building a new dwelling from scratch — though the net GIA calculation may significantly reduce the CIL liability). SOCIAL HOUSING RELIEF (CIL REGULATIONS Reg 49): affordable housing that is affordable rent, social rent, or shared ownership, managed by or transferred to a registered provider (housing association) or subject to s.106 obligations ensuring it remains affordable housing for at least 250 years, is relieved from CIL — typically applied in negotiation when a development includes an affordable housing component; the registered provider must claim the relief before development commences. CHARITABLE RELIEF (CIL REGULATIONS Reg 43-44): development by a charitable institution for charitable purposes is eligible for mandatory charitable relief (100% of CIL for the charitable portion); charities must apply to the LPA before development commences. CIL DEMAND NOTICE PROCEDURE: when planning permission is granted, the LPA issues a CIL Liability Notice (setting out the calculated CIL liability); when development is about to commence, the developer submits a Commencement Notice to the LPA (timing CIL payment to the start of development); the LPA serves a CIL Demand Notice; CIL is payable at commencement unless the LPA's Instalment Policy allows phased payment (many LPAs offer 50% at commencement; 50% at practical completion, or other phased terms). SURCHARGES FOR NON-COMPLIANCE: failure to submit Commencement Notice before starting development — 20% surcharge on the CIL liability (minimum £250); failure to submit Assumption of Liability form — 5% surcharge; late payment — 5% surcharge after 30 days; 15% after 60 days; 20% after 90 days (subject to LPA enforcement policy). CIL vs s.106 PLANNING OBLIGATIONS: CIL is a MANDATORY NON-NEGOTIABLE LEVY applied at the LPA's Charging Schedule rate to all qualifying development — the developer cannot negotiate the rate down; CIL is POOLED for general infrastructure across the LPA area (highways; schools; open space; flooding; libraries — as set out in the LPA's Regulation 123 List or Infrastructure Funding Statement); Section 106 obligations are NEGOTIATED planning conditions (legal agreement between the developer and the LPA under TCPA 1990 s.106) securing SITE-SPECIFIC affordable housing contributions; open space; transport improvements; education contributions; employment skills; ecological mitigation; s.106 contributions are tied to the specific site and can be negotiated to reflect viability; BOTH CIL AND s.106 CAN APPLY to the same development; the LPA cannot use CIL for items secured by s.106 (no double-charging); CIL cannot be used to fund affordable housing (that is a s.106 obligation)

Frequently asked questions