The Community Infrastructure Levy (Amendment) Regulations 2014

Amendment to Part 6 – exemptions and reliefs

7.—(1) After regulation 42 (exemption for minor development) insert—

“Exemption for residential annexes or extensions

42A.—(1) Subject to paragraphs (5) and (6), a person (P) is exempt from liability to pay CIL in respect of development if—

(a)P owns a material interest in a dwelling (“main dwelling”);

(b)P occupies the main dwelling as P’s sole or main residence; and

(c)the development is a residential annex or a residential extension.

(2) The development is a residential annex if it—

(a)is wholly within the curtilage of the main dwelling; and

(b)comprises one new dwelling.

(3) The development is a residential extension if it—

(a)is an enlargement to the main dwelling; and

(b)does not comprise a new dwelling.

(4) An exemption or relief under this regulation—

(a)in respect of a residential annex is known as an exemption for residential annexes;

(b)in respect of a residential extension is known as an exemption for residential extensions.

(5) An exemption for residential annexes or extensions cannot be granted to the extent that the collecting authority is satisfied that to do so would constitute a State aid which is required to be notified to and approved by the European Commission.

(6) Where paragraph (5) applies, the collecting authority must grant relief up to the amount that would not constitute a State aid which is required to be notified to and approved by the European Commission.

Exemption for residential annexes or extensions: procedure

42B.—(1) A person who wishes to benefit from the exemption for residential annexes or extensions must submit a claim to the collecting authority in accordance with this regulation.

(2) The claim must—

(a)be received by the collecting authority before commencement of the chargeable development;

(b)be submitted to the collecting authority in writing on a form published by the Secretary of State (or a form substantially to the same effect);

(c)include the particulars specified or referred to in the form; and

(d)be accompanied by the documents specified or referred to in the form.

(3) A claim under this regulation will lapse where the chargeable development to which it relates is commenced before the collecting authority has notified the claimant of its decision on the claim.

(4) As soon as practicable after receiving a valid claim, and subject to regulation 42A(5), the collecting authority must grant the exemption and notify the claimant in writing of the exemption granted (or the amount of relief granted, as the case may be).

(5) A claim for an exemption for residential annexes or extensions is valid if it complies with the requirements of paragraph (2).

(6) A person who is granted an exemption for residential annexes or residential extensions ceases to be eligible for that exemption if a commencement notice is not submitted to the collecting authority before the day the chargeable development is commenced.

Withdrawal of the exemption for residential annexes

42C.—(1) This regulation applies if an exemption for residential annexes is granted and a disqualifying event occurs before the end of the clawback period.

(2) For the purposes of this regulation, a disqualifying event is—

(a)the use of the main dwelling for any purpose other than as a single dwelling;

(b)the letting of the residential annex; or

(c)the sale of the main dwelling or the residential annex unless they are sold at the same time to the same person.

(3) Where this regulation applies the relevant person is liable to pay—

(a)an amount of CIL equal to the amount of CIL that would have been payable on commencement of the development if the exemption had not been granted; or

(b)if regulation 42A(6) applies, the amount of the relief granted.

(4) The relevant person must notify the collecting authority in writing of the disqualifying event before the end of the period of 14 days beginning with the day on which the disqualifying event occurs.

(5) As soon as practicable after receiving the notice of the disqualifying event, the collecting authority must notify the relevant person in writing of the amount of CIL payable under paragraph (3).

(6) In this regulation—

(a)“main dwelling” and “residential annex” have the same meaning as in regulation 42A; and

(b)“relevant person” means the person benefitting from the exemption for residential annexes in respect of the dwelling which has ceased to qualify for the exemption.”

(2) In regulation 46, for paragraph 2(c) substitute—

“(c)make the document available for inspection—

(i)at its principal office, and

(ii)at the places at which the document mentioned in paragraph (1) was made available for inspection under paragraph (1)(c)(ii), or, if the charging authority considers that any such places are no longer appropriate, such other places within its area as it considers appropriate; and”.

(3) In regulation 47(7), omit “on or”.

(4) For regulation 49 (social housing relief) substitute—

“Social housing relief

49.—(1) A chargeable development which comprises or is to comprise qualifying dwellings or qualifying communal development (in whole or in part) is eligible for relief from liability to CIL.

(2) For the purposes of this regulation a qualifying dwelling is a dwelling which satisfies at least one of the following four conditions.

(3) Condition 1 is that the dwelling is let by a local housing authority on one of the following—

(a)a demoted tenancy;

(b)an introductory tenancy;

(c)a secure tenancy;

(d)an arrangement that would be a secure tenancy but for paragraph 4ZA or 12 of Schedule 1 to the Housing Act 1985(1).

(4) Condition 2 is that all of the following criteria are met—

(a)the dwelling is occupied in accordance with shared ownership arrangements within the meaning of section 70(4) of the Housing and Regeneration Act 2008(2);

(b)the percentage of the value of the dwelling paid as a premium on the day on which a lease is granted under the shared ownership arrangement does not exceed 75 per cent of the market value (where the market value at any time is the price which the dwelling might reasonably be expected to fetch if sold at that time on the open market);

(c)on the day on which a lease is granted under the shared ownership arrangements, the annual rent payable is not more than three per cent of the value of the unsold interest; and

(d)in any given year the annual rent payable does not increase by more than the percentage increase in the retail prices index for the year to September immediately preceding the anniversary of the day on which the lease was granted plus 0.5 per cent.

(5) Condition 3 is that, in England—

(a)the dwelling is let by a private registered provider of social housing on one of the following—

(i)an assured tenancy (including an assured shorthold tenancy);

(ii)an assured agricultural occupancy;

(iii)an arrangement that would be an assured tenancy or an assured agricultural occupancy but for paragraph 12(1)(h) or 12ZA of Schedule 1 to the Housing Act 1988(3);

(iv)a demoted tenancy; and

(b)one of the criteria described in paragraph (6) is met.

(6) The criteria are—

(a)the rent is—

(i)subject to the national rent regime, and

(ii)regulated under a standard controlling rents set by the Regulator of Social Housing under section 194 of the Housing and Regeneration Act 2008;

(b)the rent is—

(i)not subject to the national rent regime;

(ii)not regulated under a standard controlling rents set by the Regulator of Social Housing under section 194 of the Housing and Regeneration Act 2008; and

(iii)no more than 80 per cent of market rent;

(c)the rent is—

(i)not subject to the national rent regime; and

(ii)regulated under a standard controlling rents set by the Regulator of Social Housing under section 194 of the Housing and Regeneration Act 2008 which requires the initial rent to be no more than 80 per cent of the market rent of the property (including service charges).

(7) Condition 4 is that, in Wales—

(a)the dwelling is let by a registered social landlord (within the meaning of Part 1 of the Housing Act 1996(4)) on one of the following—

(i)an assured tenancy (including an assured shorthold tenancy);

(ii)an assured agricultural occupancy;

(iii)a demoted tenancy;

(iv)an arrangement that would be an assured tenancy or an assured agricultural occupancy but for paragraph 12(1)(h) or12ZA of Schedule 1 to the Housing Act 1988; and

(b)the rent is no more than 80 per cent of market rent.

(8) Any claim for relief under this regulation relating to qualifying communal development must be made either—

(a)at the same time as the claim for relief in respect of the qualifying dwellings to which the qualifying communal development in question relates; or

(b)where the qualifying dwellings referred to in sub-paragraph (a) are granted permission through a phased planning permission, in relation to any phase of that permission.

(9) Relief under this regulation, or regulation 49A, is referred to in these Regulations as social housing relief.

(10) Social housing relief is given by deducting the qualifying amount from what would otherwise be the amount of liability to CIL that would arise in respect of the chargeable development.

(11) In this regulation—

“assured agricultural occupancy”, “assured shorthold tenancy” and “assured tenancy” have the same meanings as in Part 1 of the Housing Act 1988;

“demoted tenancy” means a tenancy to which section 20B of the Housing Act 1988(5) or section 143A of the Housing Act 1996(6) applies;

“introductory tenancy” has the same meaning as in Chapter 1 of Part 5 of the Housing Act 1996;

“market rent” means the rent which the lease might reasonably be expected to fetch at that time on the open market;

“national rent regime” means the rent influencing regime set out in the Social Rent Guidance within the Rent Standard Guidance as published by the Regulator of Social Housing in March 2012;

“secure tenancy” has the same meaning as in Part 4 of the Housing Act 1985; and

“unsold interest” means the freehold interest or the leasehold interest owned by the person providing the dwelling.”.

(5) After regulation 49 (social housing relief) insert—

“Discretionary social housing relief

49A.—(1) A chargeable development is eligible for relief from liability to CIL if—

(a)discretionary social housing relief is available in the area in which the chargeable development will be situated; and

(b)the development comprises or is to comprise qualifying dwellings or qualifying communal development (in whole or in part).

(2) For the purposes of this regulation a dwelling is a qualifying dwelling if all of the following criteria are met—

(a)the dwelling is sold for no more than 80% of its market value (where the market value at any time is the price which the dwelling might reasonably be expected to fetch if sold at that time on the open market);

(b)the dwelling is sold in accordance with any policy published by the charging authority under regulation 49B(1)(a)(iii); and

(c)the liability to pay CIL in relation to the dwelling remains with the person granted discretionary social housing relief.

(3) Any claim for relief under this regulation relating to qualifying communal development must be made either—

(a)at the same time as the claim for relief in respect of the qualifying dwellings to which the qualifying communal development in question relates; or

(b)where the qualifying dwellings referred to in sub-paragraph (a) are granted permission through a phased planning permission, in relation to any phase of that permission.

(4) Social housing relief is given by deducting the qualifying amount from what would otherwise be the amount of liability to CIL that would arise in respect of the chargeable development.

Discretionary social housing relief: notification requirements

49B.—(1) A charging authority which wishes to make discretionary social housing relief available in its area must—

(a)issue a document which—

(i)gives notice that discretionary social housing relief is available in its area,

(ii)states the date on which the collecting authority will begin accepting claims for relief, and

(iii)to the extent that the charging authority is responsible for allocating the housing to be granted relief, includes a policy statement setting out how that housing is to be allocated in its area;

(b)publish the document on its website;

(c)make the document available for inspection—

(i)at its principal office, and

(ii)at such other places within its area as it considers appropriate; and

(d)send a copy of the document to the collecting authority (if it is not the charging authority).

(2) Where a charging authority wishes to revise its policy on the allocation of the relevant housing in its area it must—

(a)issue a document which—

(i)gives notice of the revised policy,

(ii)states the date from which the revised policy applies, and

(iii)includes a revision of the policy statement mentioned in paragraph (1)(a)(iii);

(b)publish the document on its website;

(c)make the document available for inspection—

(i)at its principal office, and

(ii)at the places at which the document mentioned in paragraph (1) was made available for inspection under paragraph (1)(c)(ii), or, if the charging authority considers that any such places are no longer appropriate, such other places within its area as it considers appropriate; and

(d)send a copy of the document to the collecting authority (if it is not the charging authority).

(3) A charging authority which no longer wishes discretionary social housing relief to be available in its area must—

(a)issue a statement giving notice to that effect and stating the last day on which the collecting authority will accept claims for relief;

(b)publish the statement on its website;

(c)make the statement available for inspection—

(i)at its principal office, and

(ii)at the places at which the document mentioned in paragraph (1) was made available for inspection under paragraph (1)(c)(ii), or, if the charging authority considers that any such places are no longer appropriate, such other places within its area as it considers appropriate; and

(d)send a copy of the statement to the collecting authority (if it is not the charging authority).

(4) The day mentioned in paragraph (3)(a) must be no earlier than the end of the period of 14 days beginning with the day on which the statement mentioned in that paragraph is published on the charging authority’s website.

Social housing relief: qualifying communal development

49C.—(1) For the purposes of this regulation, qualifying communal development is the amount of communal development (calculated in accordance with paragraph (4)) which is for the benefit of the occupants of more than one qualifying dwelling.

(2) Subject to paragraph (3), development is communal development if it is development for the benefit of the occupants of more than one qualifying dwelling, whether or not it is also for the benefit of the occupants of relevant development.

(3) Development is not communal development if it is—

(a)wholly or partly made up of one or more dwellings;

(b)wholly or mainly for use by the general public;

(c)wholly or mainly for the benefit of occupants of development which is not relevant development; or

(d)to be used wholly or mainly for commercial purposes.

(4) The gross internal area of any communal development that is qualifying communal development must be calculated by applying the following formula—

(5) In this regulation, “relevant development” means development which is granted permission by the same planning permission as the qualifying dwellings in question, but which does not include the qualifying dwellings or the communal development.”

(6) For regulation 50, substitute—

“Social housing relief: qualifying amount

50.—(1) The amount of social housing relief for which a chargeable development is eligible (“the qualifying amount”) must be calculated in accordance with this regulation.

(2) The qualifying amount is an amount equal to the aggregate of the qualifying amounts at each of the relevant rates.

(3) The relevant rates are the rates, taken from the relevant charging schedules, at which, but for social housing relief, CIL would be chargeable in respect of the parts of the chargeable development which will comprise—

(a)qualifying dwellings; or

(b)qualifying communal development.

(4) The qualifying amount at a given relevant rate (R) must be calculated by applying the following formula—

(5) Paragraph (6) of regulation 40 applies to determine the index figure for a given year.

(6) Paragraphs (7) to (10) of regulation 40 apply for the purpose of calculating A with the following modifications—

(a)for G_R, substitute Q_R, and

(b)for K_R, substitute K_QR

where—

Q_R = the gross internal areas of the part of the chargeable development which will comprise the qualifying dwellings or qualifying communal development, and in respect of which, but for social housing relief, CIL would be chargeable at rate R; and

K_QR = the aggregate of the gross internal areas of the following—

(i)relevant retained parts of in-use buildings; and

(ii)for other relevant buildings, relevant retained parts where the intended use following completion of the chargeable development is a use that is able to be carried on lawfully and permanently without further planning permission in that part on the day before planning permission first permits the chargeable development.

(7) Where—

(a)social housing relief has been granted in relation to a development; and

(b)planning permission is granted under section 73 of TCPA 1990 in respect of that development; and

(c)the amount of social housing relief calculated in accordance with this regulation that the development is eligible for has not changed as a result of the planning permission referred to in sub-paragraph (b),

anything done in relation to an application for social housing relief made under regulation 51 (social housing relief: procedure) in relation to the development referred to in sub-paragraph (a) is to be treated as if it was done in relation to development that the planning permission referred to in sub-paragraph (b) relates to.

(8) In this regulation—

(a)a reference to part of a chargeable development which will comprise qualifying dwellings includes a reference to part of a chargeable development which comprises qualifying dwellings;

(b)“relevant retained part” means part of a building which will be—

(i)on the relevant land on completion of the chargeable development (excluding new build),

(ii)part of the chargeable development on completion, and

(iii)chargeable at rate R but for social housing relief;

(c)“building”, “in-use building”, “new build”, “relevant building” and “relevant charging schedules” have the same meaning as in regulation 40.”

(7) In regulation 51 (social housing relief: procedure)—

(a)in paragraph (3)—

(i)at the beginning of sub-paragraph (b) insert “subject to paragraph (4A),”, and

(ii)in sub-paragraph (d)(ii) after “regulation 49” insert “, the criteria mentioned in regulation 49A(2) or regulation 49C”;

(b)in paragraph (4) for “A claim” substitute “Subject to paragraph (4A), a claim”;

(c)after paragraph (4) insert—

“(4A) Paragraphs (3)(b) and (4) do not apply where the provision of qualifying dwellings or qualifying communal development in respect of a chargeable development changes after the commencement of that development.”;

(d)in paragraph (8)—

(i)in sub-paragraph (a) omit the second “and”, and

(ii)after sub-paragraph (a) insert—

“(aa)identifies the qualifying communal development (if any) and the gross internal area of that development; and”; and

(e)after paragraph (8) insert—

“(9) Paragraph (10) applies where a charging authority issues a statement (in accordance with regulation 49B(3)(a)) giving notice that discretionary social housing relief will no longer be available in its area.

(10) Any claim for discretionary social housing relief received by the collecting authority on or before the day mentioned in regulation 49B(3)(a) in respect of a chargeable development situated in the charging authority’s area must be considered by the collecting authority.”.

(8) In regulation 52 (social housing relief: disposal of land before occupation)—

(a)in paragraph (1)—

(i)in sub-paragraph (b) after “qualifying dwellings” insert “or qualifying communal development”, and

(ii)in sub-paragraph (c) after “for occupation” insert “or that qualifying communal development is made available for use”;

(b)in paragraph (2) after “qualifying dwellings” insert “or qualifying communal development”;

(c)in paragraph (3)(a)(i) after “qualifying dwellings” insert “or qualifying communal development”; and

(d)in paragraph (7)—

(i)in sub-paragraph (a) after “qualifying dwellings” insert “or qualifying communal development”, and

(ii)in sub-paragraph (b) after “dwellings” insert “or development (as the case may be)”.

(9) In regulation 53 (withdrawal of social housing relief)—

(a)in paragraph (2) after “qualifying dwelling”, in both places, insert “or qualifying communal development”;

(b)in paragraph (3)—

(i)after “qualifying dwelling”, in each place it occurs, insert “or qualifying communal development”,

(ii)omit “or” at the end of sub-paragraph (c),

(iii)in sub-paragraph (d) for “2008.” substitute “2008; or”, and

(iv)after sub-paragraph (d) insert—

“(e)discretionary social housing relief has been granted in relation to the dwelling or qualifying communal development, and the dwelling or development (as the case may be) is disposed of in accordance with regulation 49A(2).”;

(c)in paragraph (7)—

(i)in sub-paragraph (a) after “qualifying dwelling” insert “(if any)”, and omit “and”,

(ii)after sub-paragraph (a) insert—

“(aa)state the gross internal area of the development which has ceased to be qualifying communal development (if any); and”, and

(iii)in sub-paragraph (b) after “sub-paragraph (a)” insert “or the development mentioned in sub-paragraph (aa)”; and

(d)in paragraph (10) after “qualifying dwelling” insert “, or the development which has ceased to be qualifying communal development”.

(10) After regulation 54 (social housing relief: information notice) insert—

“Exemption for self-build housing

54A.—(1) Subject to paragraphs (10) and (11), a person (P) is eligible for an exemption from liability to pay CIL in respect of a chargeable development, or part of a chargeable development, if it comprises self-build housing or self-build communal development.

(2) Self-build housing is a dwelling built by P (including where built following a commission by P) and occupied by P as P’s sole or main residence.

(3) The amount of any self-build communal development that P can claim the exemption in relation to is to be determined in accordance with paragraphs (4) to (6).

(4) Subject to paragraph (5), development is self-build communal development if it is for the benefit of the occupants of more than one dwelling that is self-build housing, whether or not it is also for the benefit of the occupants of relevant development.

(5) Development is not self-build communal development if it is—

(a)wholly or partly made up of one or more dwellings;

(b)wholly or mainly for use by the general public;

(c)wholly or mainly for the benefit of occupants of development which is not relevant development; or

(d)to be used wholly or mainly for commercial purposes.

(6) The amount of any self-build communal development that P can claim the exemption in relation to must be calculated by applying the following formula—

(7) In this regulation, “relevant development” means development which is authorised by the same planning permission as the self-build housing in question, but which does not include the self-build housing or the self-build communal development.

(8) In order to claim the exemption in relation to self-build communal development, P must assume liability to pay CIL in respect of that development (and may do so jointly in respect of the chargeable development) and either claim the exemption—

(a)at the same time as P claims the exemption in respect of the self-build housing; or

(b)where the self-build housing is granted permission through a phased planning permission, in relation to any phase of that permission.

(9) An exemption or relief under this regulation is known as an exemption for self-build housing.

(10) An exemption for self-build housing cannot be granted to the extent that the collecting authority is satisfied that to do so would constitute a State aid which is required to be notified to and approved by the European Commission.

(11) Where paragraph (10) applies, the collecting authority must grant relief up to an amount which would not constitute a State aid which is required to be notified to and approved by the European Commission.

Exemption for self-build housing: procedure

54B.—(1) A person who wishes to benefit from the exemption for self-build housing must submit a claim to the collecting authority in accordance with this regulation.

(2) The claim must—

(a)be made by a person who—

(i)intends to build, or commission the building of, a new dwelling, and intends to occupy the dwelling as their sole or main residence for the duration of the clawback period, and

(ii)has assumed liability to pay CIL in respect of the new dwelling, whether or not they have also assumed liability to pay CIL in respect of other development;

(b)be received by the collecting authority before commencement of the chargeable development;

(c)be submitted to the collecting authority in writing on a form published by the Secretary of State (or a form substantially to the same effect);

(d)include the particulars specified or referred to in the form; and

(e)where more than one person has assumed liability to pay CIL in respect of the chargeable development, clearly identify the part of the development that the claim relates to.

(3) A claim under this regulation will lapse where the chargeable development to which it relates is commenced before the collecting authority has notified the claimant of its decision on the claim.

(4) As soon as practicable after receiving a valid claim, and subject to regulation 54A(10), the collecting authority must grant the exemption and notify the claimant in writing of the exemption granted (or the amount of relief granted, as the case may be).

(5) A claim for an exemption for self-build housing is valid if it complies with the requirements of paragraph (2).

(6) A person who is granted an exemption for self-build housing ceases to be eligible for that exemption if a commencement notice is not submitted to the collecting authority before the day the chargeable development is commenced.

Exemption for self-build housing: completion of development

54C.—(1) A person (P) granted an exemption for self-build housing in respect of development (D) must comply with this regulation.

(2) Within six months of the date of the compliance certificate for D, P must submit a form to the collecting authority confirming that D is self-build housing or self-build communal development (as the case may be).

(3) The form referred to in paragraph (2) must—

(a)be submitted in writing on a form published by the Secretary of State (or a form to substantially the same effect);

(b)include the particulars specified or referred to in the form; and

(c)be accompanied by the documents specified or referred to in the form.

Withdrawal of the exemption for self-build housing

54D.—(1) This regulation applies if an exemption for self-build housing is granted and a disqualifying event occurs before the end of the clawback period.

(2) For the purposes of this regulation, a disqualifying event is—

(a)any change in relation to the self-build housing or self-build communal development which is the subject of the exemption such that it ceases to be self-build housing or self-build communal development;

(b)a failure to comply with regulation 54C;

(c)the letting out of a whole dwelling or building that is self-build housing or self-build communal development;

(d)the sale of the self-build housing; or

(e)the sale of the self-build communal development.

(3) Subject to paragraphs (5) and (6), where this regulation applies the exemption for self-build housing granted in respect of the self-build housing or self-build qualifying development is withdrawn and the relevant person is liable to pay—

(a)an amount of CIL equal to the amount of CIL that would have been payable on commencement of the development if the exemption had not been granted; or

(b)where regulation 54A(11) applies, the amount of relief granted.

(4) The relevant person must notify the collecting authority in writing of the disqualifying event before the end of the period of 14 days beginning with the day on which the disqualifying event occurs.

(5) The collecting authority must notify the relevant person at least 28 days before taking any action in relation to a disqualifying event under paragraph (2)(b), informing them of the date after which they intend to take any such action.

(6) If the relevant person submits to the collecting authority a form which complies with the requirements of regulation 54C(3) before the date mentioned in paragraph (5), the exemption is not withdrawn and the collecting authority may take no further action in relation to that disqualifying event.

(7) As soon as practicable after receiving the notice of the disqualifying event (or the expiry of the period in paragraph (5), as the case may be) the collecting authority must notify the relevant person in writing of the amount of CIL payable under paragraph (3).

(8) In this regulation “relevant person” means the person benefitting from the exemption for self-build housing in respect of the dwelling or communal development which has ceased to qualify for the exemption.”.

(11) In regulation 55(3)(c) (discretionary relief for exceptional circumstances) omit paragraph (i).

(12) In regulation 56, for paragraph (2)(c) substitute—

“(c)make the document available for inspection—

(i)at its principal office, and

(ii)at the places at which the document mentioned in paragraph (1) was made available for inspection under paragraph (1)(c)(ii), or, if the charging authority considers that any such places are no longer appropriate, such other places within its area as it considers appropriate; and”.

(13) In regulation 57 (exceptional circumstances relief: procedure)—

(a)in paragraph (4)(d) omit paragraph (i);

(b)for paragraph (6), substitute—

“(6) The claimant must—

(a)send a copy of the completed claim form to the owners of the other material interests in the relevant land (if any);

(b)notify those owners that the particulars referred to in paragraph 4(d) are available on request; and

(c)send a copy of those particulars to any owners who ask for them.”; and

(c)in paragraph (11)(a)(i) after “social housing relief” insert “or an exemption for self-build housing or residential annexes or extensions”.