The Infrastructure Levy and what replaces the current charge

Nothing has replaced the Community Infrastructure Levy. As at 8 October 2026, the question of the Infrastructure Levy replacing CIL remains a set of unused powers in the Levelling-up and Regeneration Act 2023, and the government has told the Housing, Communities and Local Government Committee that it intends to improve the existing system of developer contributions rather than introduce a new mechanism. So CIL and section 106 are what you appraise against, and anyone pricing land on the assumption of a value-based levy is pricing a regime that may never arrive.

That is a useful position to understand properly, because the powers are still on the statute book and the drafting tells you what a future government could switch on without new primary legislation.

How the current levy and obligations operate together

Two instruments, doing different jobs.

The Community Infrastructure Levy, under the Community Infrastructure Levy Regulations 2010 as amended, is a charge per square metre on net additional floorspace, set out in a charging schedule adopted by the charging authority after examination. It is optional, so not every authority levies it, and rates differ by zone and by use. Liability is fixed by the schedule in force when permission first permits development, then indexed, and administered through a liability notice, a commencement notice and a demand notice. Relief and exemptions cover self-build housing, residential annexes and extensions, charitable development and social housing, each needing to be claimed before development starts.

Section 106 obligations under the Town and Country Planning Act 1990 handle what a flat floorspace charge cannot: affordable housing, site-specific highway works, education and open space contributions tied to a particular development. Regulation 122 limits them to obligations that are necessary to make the development acceptable in planning terms, directly related to the development, and fairly and reasonably related in scale and kind. The pooling restriction that once capped contributions to a single project from five or more agreements was removed in 2019, and authorities have published annual Infrastructure Funding Statements since then.

The friction between the two is the whole reason reform was proposed. A council with a CIL schedule cannot also seek a section 106 contribution for infrastructure on its Regulation 123 list, so the boundary gets argued over on every major application.

What the 2023 Act powers allow

Schedule 11 to the Levelling-up and Regeneration Act 2023 inserts a new Part 10A into the 1990 Act. The design, as legislated, differs from CIL in four ways that matter to an appraisal.

The shift from floorspace to value is the substantive change. A levy on gross development value rises with sales prices, which means the charge on a scheme is not known at the point the land is bought, and the final reconciliation after completion transfers risk from the authority to the developer in a way CIL does not.

Almost everything else was left to regulations: the rate-setting process, minimum thresholds, the treatment of existing floorspace, exemptions, the appeals route and the integration with section 106. Which is why the powers alone tell you very little about what a scheme would actually have paid.

The test and learn approach to introduction

The original plan was a staged introduction over roughly a decade, starting with a small number of early adopter authorities and running the new levy alongside CIL while lessons were taken from the first charging schedules. A technical consultation on the design ran in 2023.

Staged introduction has an obvious consequence for anyone operating across more than one authority: for years, the charging basis for an identical scheme would depend on which council area it sat in and when permission was granted. Land appraisals would have needed two sets of assumptions and a view on which applied. Nobody in the industry liked that, and it is part of why the direction changed.

What was expected to happen to section 106

Section 106 was never going to disappear. The intention was to narrow it to site-specific matters and the largest or most complex sites, with routine pooled contributions absorbed into the levy and affordable housing delivered through the right to require.

The current direction is different and more modest. Rather than replacing section 106, the Ministry is working on standardising it, including consultation during 2026 on standard section 106 templates for medium-sized sites, and a data improvement project gathering practitioner evidence on how obligations and CIL actually work. Standard templates would attack the real cost of the current system, which is months of legal negotiation over clauses that end up broadly similar, not the quantum of the contributions.

Follow the published position rather than commentary. The planning law updates timeline is a reasonable place to track reform news, and the commencement detail for any provision is on legislation.gov.uk.

Risks for schemes with long consent to start periods

Where a permission is granted years before work starts, three mechanics decide what you pay.

1. CIL liability attaches to the charging schedule in force when permission first permits development, then indexation applies to the date of the commencement notice. A long gap means indexation, not a new charging basis.
2. A section 73 application to vary a condition can recalculate liability, and on an older permission that recalculation can use a later schedule. This catches developers who vary a consent to improve it.
3. Phased permissions treat each phase as a separate chargeable development with its own commencement notice, which is both an opportunity and a trap. Getting the commencement notice wrong removes relief and can trigger surcharges, as set out in commencement notices and the CIL amendment regulations.

If a value-based levy were ever introduced, transitional provisions would decide whether an unimplemented permission fell under the old or new regime. There are no such provisions yet, so a land deal that depends on knowing the answer is a deal with an unpriced risk in it.

Appraisal assumptions while the position is uncertain

Appraise the regime that exists.

Take the adopted charging schedule for the authority, apply the current index figure rather than the one in the last appraisal, and check whether the authority is reviewing its schedule, because a review in progress is the nearest thing to a real change of charge. Build the section 106 package from the council's own planning obligations supplementary planning document and from recent agreements on comparable schemes in that authority, which are public documents on the planning register.

Then sensitivity test two things: indexation over your programme, and a change in affordable housing policy on adoption of a new local plan. Those are the realistic variables. A speculative new levy is not, and loading an appraisal with a notional levy rate produces a land value nobody can defend. Where emerging plan policy is the live uncertainty, plan making reform and what happens to emerging plans covers how much weight to give it.

Keep a dated note of when the assumptions were fixed and against which schedule. On a scheme running three years, that note is what lets you explain a change to a lender without reopening the whole appraisal.

What to monitor before committing to a land deal

Six things, checkable in under an hour:

• Commencement information for Schedule 11 to the 2023 Act on legislation.gov.uk, which shows whether any of the Part 10A provisions have been brought into force.
• The authority's adopted CIL charging schedule, its date, and whether a review or a new examination is under way.
• The authority's annual Infrastructure Funding Statement, which shows what has been collected and allocated.
• The authority's planning obligations policy and any affordable housing viability evidence supporting the emerging local plan.
• Open consultations from the Ministry of Housing, Communities and Local Government on developer contributions.
• Other obligations that attach regardless of levy reform, such as the biodiversity gain condition, which applies through the biodiversity gain condition on every permission and has its own cost and timing consequences. Drainage approval under Schedule 3 to the Flood and Water Management Act 2010 is in the same category, discussed in Schedule 3 SuDS approval and where it stands.

Source instruments for this article are Schedule 11 to the Levelling-up and Regeneration Act 2023, the Community Infrastructure Levy Regulations 2010 as amended, and section 106 of the Town and Country Planning Act 1990. Position stated as at 8 October 2026. And re-check it on gov.uk, because this is an area where announcements move faster than guidance.

This is general guidance, not legal advice; check the position with your local planning authority or a qualified professional before relying on it.