Self-Builders: How do you avoid the Community Infrastructure Levy (CIL)?
Calling all self-builders, are you aware of the Community Infrastructure Levy (CIL)?
It is a planning charge that allows local authorities in England and Wales to raise funds from developers of new build projects to support local infrastructure projects. The good news is that if you’re planning to build your own home you can be exempt from the charges.
We have cut through the jargon to help you understand who can claim exemption, when and how it can be claimed and what evidence is needed. Read on to find out.
Who can claim exemption?
If you build your own home or commission the building of your own home then you may be eligible for the exemption. Community group self-build projects also qualify for the exemption where they meet the required criteria.
When can the exemption be claimed?
An exemption for a self-build home must be granted before the development has started and cannot be claimed retrospectively.
How can the exemption be claimed?
Anyone wishing to claim exemption must take the following to steps prior to development:
Step 1: You must assume liability to pay the levy in relation to the development. This is done by completing an Assumption of Liability form. If the original levy liability was in the name of a developer then the self-build applicant must complete a Transfer of Assumed Liability form and submit this to the collecting authority.
Step 2: You must certify that your planned development will meet the criteria to qualify as a ‘self-build’ by submitting a Self-Build Exemption form – Part 1 and self-certify:
- The name and address of the person(s) claiming liability
- That the project is a self –build project
- That the you will occupy the premises as your principal premises for a period of 3 years from completion
- That the you will provide the required supporting documentation on project completion the confirm the development qualifies for relief
If an exemption is granted, what happens next?
If exemption has been granted the chargeable amount will be registered as a ‘local land charge’ on the property for three years from completion. Before commencing the development a Commencement Notice must be submitted to the charging authority. This must state the date on which the development will commence, and the collecting authority must receive it on or before that date. If this is not submitted in time you will immediately become liable for the full levy charge.
What evidence is needed on completing the building?
Within 6 months of completion you must submit additional supporting evidence to confirm that the project is a self-build. If evidence isn’t submitted within this time frame, the full levy charge becomes payable.
Evidence must include:
- Proof of the completion date
- Proof of ownership
- Proof of occupation of the dwelling as your principal residence
In addition to this, you must also provide a copy of one of the following:
- An approved claim for a VAT refund from HM Revenue and Customs or;
- A specialist Self Build Warranty or;
- An approved Self Build Mortgage from a bank or building society
What is a Self-Build Warranty?
A self-build warranty is a warranty and Certificate of Insurance issued by a warranty provider which provides a ‘latent defects insurance’ policy and which is accompanied by certified Stage Completion Certificates issued to the owner/occupier of the home.
To find out more information visit our Self-Build Warranty page or call us today on 0800 183 1755.
What is a Self-Build mortgage?
A Self-Build Mortgage is an approved mortgage arranged to purchase land and/or fund the cost of erecting a house where the loan funds are paid out to the owner/occupier in stages as the building works progress to completion.
To find out more information about CIL exemptions for a Self-Build home visit the Government's help page here.