Community Infrastructure Levy: what it is and how councils apply it to new developments

The Community Infrastructure Levy is a charge that local councils place on new housing developments to fund infrastructure improvements in the area. Albert Street explains how CIL works, what it pays for, and how it differs from other developer contributions. You'll understand how councils calculate the levy, where the money goes, and what CIL means if you're buying a new home or watching a development take shape near you.

How the levy works

CIL is calculated per square metre of new floor space. The council sets a rate in its charging schedule, published as part of the local plan. Residential developments typically face higher rates than commercial projects, and the charge applies to most new buildings and extensions above a certain size threshold.

The developer pays the levy after planning permission is granted and building work begins. Payment deadlines vary depending on the total amount owed, with smaller sums due in full within a set period and larger amounts payable in instalments. Councils publish their payment schedules alongside the charging rates, so the timing is known from the start.

Relief and exemptions exist for certain types of development. Self-build housing, social housing, and charitable developments often qualify for reduced rates or full relief. Each council's charging schedule sets out the criteria, and developers must apply for relief before building work starts.

What the money funds

CIL receipts pay for infrastructure that supports growth across the area rather than addressing the specific impact of a single development. The levy funds roads, schools, health facilities, parks, and leisure centres. Councils must publish a list of projects they intend to fund through CIL, known as the infrastructure funding statement, updated each year.

A portion of CIL income goes directly to the neighbourhood where development takes place. In areas with a neighbourhood plan, the local council or parish receives a higher percentage. That money can be spent on a wider range of local priorities, not limited to infrastructure, as long as the spending supports development in the area.

The remaining CIL income sits in the council's general fund for infrastructure. Councils cannot use it for day-to-day services or maintenance costs. The levy is meant to bridge the funding gap for new facilities that existing council budgets would struggle to cover, particularly when housing numbers rise sharply.

Difference between CIL and Section 106

Section 106 agreements address the direct impact of a specific development, such as access roads, affordable housing on the site, or improvements to a nearby junction. CIL funds broader infrastructure needs across the borough. The two mechanisms work alongside each other, though planning reforms have aimed to reduce overlap.

Where CIL is in place, councils cannot use Section 106 to fund infrastructure already listed on the CIL funding schedule. Section 106 obligations remain focused on making a development acceptable in planning terms—mitigating harm, delivering on-site affordable homes, or ensuring safe access. You can read more about how these agreements work in our guide to Section 106 and what it means for homebuyers.

Some councils have introduced CIL while others continue to rely solely on Section 106. The choice depends on local circumstances, the scale of planned development, and the council's view of which system works better for their area. The local plan sets out which approach applies and publishes the charging schedule where CIL is adopted.

Calculating the charge

Councils multiply the rate per square metre by the gross internal floor area of the new development. The calculation excludes existing floor space that is being retained or demolished, so only the net increase in floor area attracts the charge. The rate itself varies by zone within the borough, with higher-value areas sometimes facing higher charges because the levy must not make viable development impossible.

Indexation adjusts the rate each year in line with construction cost inflation. The council applies the rate in force on the date planning permission is granted, then indexes it to the date of payment. That protects the real value of CIL income but means the final figure can rise between permission and payment if construction costs increase.

The charging schedule published by the council includes a map showing which zone applies to each part of the borough. You can check the applicable rate by finding the site on the map and reading the corresponding charge. Councils must make the schedule and the supporting evidence publicly available, usually on their planning portal.

Checking what applies to a development

1. Visit the council's planning portal and locate the charging schedule, usually found under 'Planning policy' or 'Developer contributions'.
2. Identify the development site on the CIL zone map to see which rate applies.
3. Read the council's infrastructure funding statement to understand what projects CIL income will support in the area.
4. Check the planning application documents for any CIL liability notice or exemption claim submitted by the developer.
5. Review the Section 106 agreement, if one exists, to see which contributions fall under Section 106 and which are covered by CIL.

Impact on homebuyers

CIL is paid by the developer, not the buyer, so it does not appear as a separate cost on your purchase. The levy forms part of the development's overall cost, which influences the sale price the developer sets. In that sense, CIL is built into the asking price, though it sits alongside land cost, construction cost, and the developer's margin.

The infrastructure funded by CIL benefits the area where you buy. New schools, improved transport links, and additional green space make the neighbourhood more attractive and can support property values over time. The levy ensures that growth is accompanied by the facilities residents need, rather than leaving existing infrastructure strained.

If you're buying a new home, ask the developer or the council what CIL income from the development will fund locally. The neighbourhood portion of CIL is often spent on projects close to the site, such as park improvements, community facilities, or traffic-calming measures. Knowing what's planned gives you a clearer picture of how the area will change.

Tools for comparing developments

Viability and charging rates

Councils must set CIL rates at a level that does not make most development unviable. Before adopting the charging schedule, the council commissions a viability assessment that tests whether typical developments can afford the levy alongside other planning obligations. The assessment considers land values, build costs, and expected sales prices across different parts of the borough.

Where viability is marginal, councils may set lower rates or apply exemptions. The balance aims to capture a fair contribution without deterring development altogether. Developers can challenge a CIL rate by arguing that it makes a specific site unviable, though such challenges require detailed financial evidence and are heard through the planning appeals process.

Changes to CIL rates require a formal review of the charging schedule, including public consultation and an independent examination. Councils cannot alter the rate for a single development or negotiate it down in the way they can adjust Section 106 obligations. That certainty helps developers assess costs early, but it also means the levy is less flexible than negotiated agreements.

Where to find local CIL information

Every council that has adopted CIL publishes its charging schedule, zone map, and infrastructure funding statement on its website. The planning portal is the usual location, often under a section labelled 'Developer contributions' or 'Planning obligations'. If you're tracking a specific development, our guide to finding new housing developments explains how to locate planning documents and follow what's been approved.

The infrastructure funding statement lists CIL income received, projects funded, and spending planned for the coming year. It also breaks down the neighbourhood portion and how much has been allocated to local priorities. Reading the statement gives you a sense of whether CIL income is being spent promptly or accumulating in the council's account.

Parish councils and neighbourhood forums that receive CIL funding must report on how they spend it. Those reports are usually published on the parish or neighbourhood plan website. If you live in an area with a neighbourhood plan, checking those updates shows what improvements are being delivered with the levy money from nearby developments.

#Planning permission #Section 106 #Local plan

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