Developers hail levy exemption on affordable housing

Developers and housebuilders have hailed final government plans for a levy on development a “significant breakthrough.”

The statutory regulations for the Community Infrastructure Levy, laid down this week exempts developers from paying the levy on affordable housing and allows councils to borrow to pay for infrastructure up front in lieu of future CIL revenues.

It also gives councils the power to make individual developments exempt entirely from the levy if the levy was in danger of making a specific development unviable. All of these provisions were not contained in earlier drafts of the regulation.

A senior development source said: “In isolation these are all significant changes but together they’re really helpful. It’s a relief as earlier in the process the government was heading off in totally the wrong direction on this.”

In isolation these are all significant changes but together they’re really helpful

The CIL is designed as a locally-set tariff on development to pay for the infrastructure needed to support it, and replaced previous government plans for a Planning Gain Supplement, dropped in 2007.

A consortium including the Home Builders’ Federation, the Local Government Association and the British Property Federation welcomed the changes.

Liz Peace, chief executive of the BPF, said: “We have all worked extremely hard with the government to steer the regulations in the right direction.”