Yes West Lothian Council already do that. Forunately, there is existing PP on the plot that goes back to before it came in, so I duck that bullet (I think)!!

Posted By: JSHarris

Posted By: borpinYes West Lothian Council already do that. Forunately, there is existing PP on the plot that goes back to before it came in, so I duck that bullet (I think)!!

AFAICS, there's no guidance at all on whether CIL can be applied to a house that is built on a plot that has PP or whether it is (like S.106) tied to planning. The only suggestion I've seen is that CIL is paid on completion, in which case even a plot that's had PP for a year or two could still be liable for it when the house is built and completed.

My understanding is that if PP has been given then the existence of a residential dwelling is taken account of in the local plan. Once you want to start to impact that plan (new house, shool requirements change for instance) you get into the CIL. This may have been so there was a cut off when it could be charged (not retrospective). Of course could be different North of the border.

One can debate the rate they are charging, but is there anythign fundamentally wrong with this kind of one off tax. Houses will only sell at what is affordable, so will make no difference to the sale price of a new build and some good may be done in the local area with the extra cash.

I can see that an unexpected expense is not welcome.

<blockquote><cite>Posted By: nigel</cite>The net effect of CIL is to reduce the value of the land, unless you already own the plot and do not have planning.

Given the increase in value of land when planning is granted I don't think there is anything wrong with contributing to the infrastructure that is need to support additional housing.</blockquote>

Although I agree that this is what should happen, in practice I'd happily bet that the extra cost just gets added to the house price, particularly as all the big developers are already sitting on massive landbanks. If they were to just take the hit (which as they already own land is what would be needed) then their bottom line would suffer, and I doubt that's going to happen any time soon.

<blockquote><cite>Posted By: nigel</cite>Housebuilders sell their houses for what they can get for them, it has little to do with what they cost.</blockquote>

Agreed, but this gives them the perfect excuse (just like the airlines with fuel surcharges) to add on the CIL and blame the government, thay can just call it another tax. It won't even make them uncompetitive, as all the developers will be hit with the same charge and so can adopt the same tactic.

That depends on there being an existing stock of housing in the area (here there is virtually nothing below £250k other than new build affordable homes). It also depends on the finance that's available. New homes frequently have very favourable finance deals, meaning they are the only realistic way for people to get a first home. The actual price isn't as big an incentive to buy one of these "starter homes" as the freedom from purchasing risk and the reduced deposit needed. I can easily see the developers just wacking this tax directly on the sale price, then sorting out a finance deal to allow first time buyers to still purchase. This will still inflate house prices at the lower end of the market, I'm sure, and I very strongly doubt if it will work to depress land prices.

The house price fall over the last few years has only started to have a small impact on land prices in the last few months. I've been plot hunting for around three or four years and it's been quite clear that the fall in house prices wasn't having any impact on land prices at all until very recently. Why should this extra tax suddenly make land prices fall?

When collecting money, you want to charge the most to the people that have the greatest ability to pay. No one ever claimed fairness.
If you except that there is a local cost to running the services to local communities you then have to decide the most effective way of raising that cash. Again fairness does not come into it. Which ever system is used to raise fixed amount of money there will be some individuals that win and some that do not, the amount raised will be the same though.
Personally I dislike property tax, much prefer and individual tax (we had one at it was great for me but mismanaged). I have suggested that the local taxed be raised on the total footprint of the property, including garden. But that would never work as someone will know someone that lives in a small house with a huge garden, and it would be unfair again.
Much easier to just divide the sum needed by the local population and get everyone to pay up.

Was that not how our rates were initially set?
So my grand a year is what I could get get if I rented the place out, would kill the buy to rent market, so lets go back to that.
Or how about finding out what the mean rental price is, the mean foot print of a property and the mean revenue raised by local authorities and then work out a formula, be the same for everyone in the nation then. Then just adjust by the RPI every year (set at the month with the lowest historic rate), would soon highlight useless local authorities that ship 300 tonnes of rock salt from Liverpool to Devon when the Devon Depot had 1500 tonnes in it.

Could get a bit more democratic and have online/postal voting about services that should reduced and ones that should be increased. Wonder how long Libraries and Social Services would last.

He is the top 5 CIL CIL payments that developers would, under councils’ published plans, be required to make on an average-sized house (in this case 76 square metres, based upon research published by the Commission for Architecture and the Built Environment in 2009).

The list is as follows:

1. £43,700 – Nine Elms area A - the riverside section of the Nine Elms area, which is earmarked for major regeneration

2. £29,260 – Wimbledon

3. £20,140 – Nine Elms area B

4. £19,000 – Wandsworth - not including the Nine Elms district and Roehampton, which is exempt from the charge).

5. £15,200 – Brent

In contrast in Mid Sussex if a new proposal goes ahead you will be paying from £11,250 in a town to £15,750 in a village and £17,250 in a so-called rural zone.

Cash up front before you start building, so better start saving, or look for a renovation rather than a new build!

I read in the legislation there is an option NOT to set a CIL charge. So maybe in some inner cities and towns we may see CIL free zones! But would you want to live there?

As a recent self builder I would not appreciate another hefty bill. I built to get an energy efficient house to my spec in the position I wanted it and the design I wanted. I went over spec on insulation and window performance including heating. The extra cost of this could have gone on CIL. The value of my property is above what the plot and build costs total but not by vast sums of cash. The way the current building regs are set regarding water harvesting etc in Wales this could just be another nail in the self build coffin. Land is expensive, labour is expensive and materials are expensive and all except land are increasing in cost. If the economy has stalled do we need another tax right now? I do not agree with this tax at this time. Possibly at another date,
Gusty.

Personally, I'd tax economists. I'm sure I could find one somewhere who could justify it.

What annoys me is that the CIL isn't to pay for the impact of _your_ new house. The CIL is in addition to any Section 106 requirements.

Shropshire has 2: Cil and an affordable housing levy. Our ~200sqm house is going to cost us £22k before we start.

Which is nice.

Luckily we're 'only' paying £40/sqm for one as it's in a town designated in need of regeneration (something like that)

I can see the justification for a certain amount of levy, but this amount and when it needs paying (soon after build start) does sting somewhat.

Can't see that it would because it's across the board, unless desperation on the vendor's part offers an opportunity for negotiation, and given the scarcity of suitable building plots...!

As I think is implied in Bealers' post, buyers just have to dig deeper. It is SO bloody cynical.

(And hits self-builders the hardest.)