25 October 2013
The Government’s promise to exempt self builders from significant Community Infrastructure Levy (CIL) payments has come a step nearer, following the completion of a formal consultation exercise.
The Department for Communities and Local Government has today confirmed that the relief from paying CIL will cover homes built or commissioned by individuals, families or groups of individuals for their own use and that will be owner-occupied.
{TEASER}
Planning Minister Nick Boles (pictured) said: “Our changes will make an enormous difference to people looking to realise their dream of having their grand design built and will save self-builders thousands of pounds.
“We urgently need to build more homes and changes to the levy will help increase housing supply and help businesses grow by making the system more flexible and fairer.”
The Government will bring in the changes following a recent consultation exercise.
This exercise revealed that the majority of local authorities were against self builders being exempted as this would reduce their income.
Developers were divided between those who thought it unfair to favour a particular sector and that a relief would be open to misuse and distort the land market, and those who welcomed a relief. Self builders were in favour of the proposal.
The Government received a response from the National Self Build Association (NaSBA) representing 604 individual self builders and contractors, and 98% of these responses were in favour of a relief.
In its conclusions the Government says: “We acknowledge that incrementally this form of housing adds to the overall impact on infrastructure. However we remain of the firm view that people who build their own homes don’t compete on a level playing field with builders… and that many find the levy charges prohibitively expensive and that they can threaten the viability of their projects. A relief would help to boost this important sub-sector of the housing industry which has significant growth potential, helping to support smaller builders and promoting local economic activity and job creation.”
The Government proposes to implement the relief via a two stage process. Prior to commencement of a project legitimate self builders will be asked to declare that their project qualifies for relief. This will be followed by a requirement to submit supporting evidence on project completion. This evidence will be one of the following:
- Proof of building ownership and occupation by the self builder for at least three years
- A building completion or compliance certificate
In addition self builders will also have to provide evidence of one of the following:
- Self build Mortgage
- Approved VAT refund
- Self Build Warranty
Although the timings are still not confirmed the changes are expected to come into effect in January 2014.
An extended set of Questions and Answers about the proposed CIL exemption for self builders has been prepared by the NaSBA and these are available here.
