The Community Infrastructure Levy (CIL) is likely to be introduced in the next year or two. It will allow LAs to levy a tax payable on the grant of planning permission for ‘development’.

CIL will be triggered by the grant of full planning permission, or reserved matters approval (not an outline permission), as well as some changes of use, some permitted development, and some retrospective planning permission). However, payment will not be due until the ‘development’ is commenced. So far, it is not clear how much will be charged (although Mid-Devon has said it plans to impose a levy of £10,000 per home, and Greater London is talking of charging £160 per sq m on Central London office space).

It is worth noting that reserved matters approval could render a building liable to CIL, even if the existing outline permission was secured before CIL comes into effect. Accordingly, it may be better to apply for reserved matters before CIL comes into force.

The relationship of CIL with s106 planning agreements is still not entirely clear. Originally, it was intended that CIL would lead to a scaling back of s106 obligations to provide primarily affordable housing. However, under current proposals that is no longer the case, and the outcome seems to be that developers will have to budget for both CIL and s106 costs. For a useful introductory article see [2009] IHL November 64.