The Infrastructure Levy powers and what happens to CIL

The Levelling-up and Regeneration Act 2023 created the powers for an Infrastructure Levy in England. It did not create the levy itself. The rates, the exemptions, the procedure, the treatment of affordable housing and the timing all sit in regulations, and until those regulations are made and a charging authority adopts a schedule, the Community Infrastructure Levy and section 106 continue to do the work.

For anyone appraising a site, infrastructure levy planning is therefore a question about two regimes running in parallel rather than one replacing the other on a date. As at 15 September 2026, check the current position on legislation.gov.uk and with the charging authority rather than relying on any summary, including this one.

What the 2023 Act enables and what it does not decide

The Act inserts the levy framework into the Planning Act 2008, the same statute that carries the Community Infrastructure Levy. Charging authorities are given the power to charge, and the mechanics are left to regulations.

That means several things that matter commercially are undecided at the level of the primary legislation. The rate. The minimum threshold below which nothing is payable. What exemptions and reliefs exist, including for self-build and for affordable housing. How liability is calculated and when it crystallises. And how the levy interacts with existing charging schedules during transition.

Reading commentary about the levy as though those points are settled is a mistake. Read the regulations when they exist, and the charging schedule when one is published.

How the levy differs from the Community Infrastructure Levy

The design difference that drives everything else is the base of the charge.

A floorspace charge is knowable at the point of permission. A value-based charge is not, because value moves. For a scheme with a three year build programme that difference is the whole appraisal question.

The second difference is scope. The Community Infrastructure Levy was designed to sit alongside a large section 106 regime. The levy is framed to absorb more of that regime.

What is proposed for section 106 obligations

Section 106 is not abolished by the Act. The stated intention is that it narrows to matters that are integral to the development itself, such as site access works, on-site open space, and the delivery of affordable housing where that is provided in kind, while pooled contributions towards wider infrastructure come through the levy.

Two practical points follow for anyone modelling a scheme.

First, a narrower section 106 does not mean a cheaper one. The obligations that stay are the site-specific ones, which are frequently the expensive ones.

Second, the affordable housing mechanism is where most of the uncertainty sits. Delivering affordable housing through a value-based levy is a different exercise from negotiating a percentage in an agreement, and an Affordable Housing Statement will have to explain whichever route applies on the site.

The staged rollout and what it means for programming

The stated approach is a staged introduction, with a limited number of authorities operating the levy first and the rest following over a period of years. That is a design choice with consequences.

For a developer with sites in several authorities, it means different charging regimes in different places at the same time, for years. For a site in an authority with an adopted Community Infrastructure Levy charging schedule, it means that schedule continues to apply until it is replaced.

Programming advice is unglamorous. Confirm with the charging authority, in writing, which regime applies to your permission, and get the answer before the appraisal is signed off rather than after.

Risks for schemes with long build periods

Three risks are worth pricing.

Timing of liability. A charge framed around later stages rather than commencement changes cash flow, and on a long scheme it changes the finance structure. That can be a benefit or a cost depending on the deal.

Value movement. Where the charge follows value, a market that rises between permission and sale increases the charge. A market that falls reduces it. Either way the appraisal needs a sensitivity range rather than a single figure, and a Viability Assessment prepared for a scheme straddling the transition has to model both regimes.

Phasing. Where a scheme is phased over several years and the regime changes part way through, the treatment of later phases depends on transitional provisions in the regulations. That is exactly the sort of detail that is settled late and matters early.

Appraising a site while both regimes may apply

Model both. It is more work and it is the only defensible approach on a site that will be permitted in one period and built out in another.

1. Establish whether the charging authority has an adopted Community Infrastructure Levy schedule and obtain the current rates, which are indexed annually.
2. Establish whether the authority has published anything about a levy charging schedule, including a timetable.
3. Model the Community Infrastructure Levy position on net additional floorspace, applying the exemptions and reliefs available.
4. Model the levy position on a value basis across a range of sale values, using whatever rate assumptions the published material supports, and label them as assumptions.
5. Model the section 106 package separately under each scenario, because the split between levy and obligation moves.
6. Carry the difference as a risk allowance rather than taking the more favourable number.

Do not convert an assumption into a figure in a board paper without labelling it. The single biggest error in appraising a regime that does not yet exist is presenting a modelled number as a known cost.

Land agreements need the same treatment. An option or a conditional contract drafted around a floorspace-based charge will not translate cleanly to a value-based one, and a clause defining the deductible planning costs should be drawn widely enough to cover both. That is a drafting point to raise with the lawyers at heads of terms rather than at completion.

The other place this shows up is in overage. An overage mechanism calculated on net receipts behaves differently when a value-based charge takes a slice of those receipts, and the parties should decide now which side of the line the levy falls.

Where to follow the position

The primary sources are the Act itself, any regulations made under it, and the charging authority's own published schedule and timetable. Government guidance on the Community Infrastructure Levy remains the reference point for the regime that is currently operating.

There is one more habit worth forming. Ask the charging authority, in writing, three questions: whether a Community Infrastructure Levy charging schedule is in force and at what indexed rates, whether the authority is in any first wave for the new levy, and what the authority's current position is on the split between levy and section 106. Keep the reply on file with the appraisal.

Rates under the existing regime are indexed annually and published by the charging authority, so a figure taken from a schedule two years ago will be wrong. Check the current schedule rather than the version saved on the last project.

Secondary commentary moves faster than the law does and is frequently ahead of it. The planning law updates timeline is a place to follow reform news of this kind, and the caution that applies to any reform in progress applies here too, as the piece on what changes when the NPPF is re-issued sets out.

This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.