Will your project be exempt

Profitable Places

Will Your Project Be Exempt From §106 in 2015?

 
What is §106?

Under Section 106 of the Town and Country Planning Act 1990 (as amended) §106 agreements provide a mechanism which make an otherwise unacceptable development proposal able to be permitted.

Using this mechanism, local authorities can charge a 'planning obligation' fee for permitting the development of land. However, the amount of this is often unknown until late in the planning process and payment is usually required before work can start on site. This has had a devastating impact on the viability of many self builds, extensions and similar projects.

Consultation

 In early 2014 Central Government decided to consult on the effects of this on developments of less than 10-units in relation to affordable housing contributions. Responses were received from hundreds of developers, organisations, individuals, and self-builders.

While recognising the need to build many more affordable homes, it was also recognised that trying to squeeze ever higher contributions out of every last site was having a devastating and counter-productive effect on small scale development.


3 Bay Garage from SolidLox

The Decision

As a result, and with the Community Infrastructure Levy, already designed to exempt self-builds and extensions, due to replace §106 from next April, the decision was made to align small developments with this.

The Minister, Eric Pickles, has now confirmed that self builders and renovators will be exempt from planning contributions under Section 106.

From 28th November 2015 sites of 10 units or less (including self builds, extensions and annexes) will be exempt from affordable housing and tariff-style contributions under §106.

The change will take place immediately.


Will your project be exempt?


This relief aims to support and incentivise self-builders and small-scale developments - especially on brownfield sites - without adverse impacts on local contributions for affordable homes and infrastructure.

Simply Self-Build Homes
https://www.youtube.com/watch?v=-If-w3_ltHU

If your project is:

  • in an urban area, has a maximum combined floor space of 1,000 m2, and is for not more than 10 units, you should not have to pay any levy.
  • in a designated rural area, e.g. a national park or an area of outstanding natural beauty, the local authority may reduce this threshold to 5 units. BUT charges for developments of 6-10 units will not have to be paid until after the development has been completed.
  • an extension or an annex, it will also be exempt.

 The Impact of Big Savings

Eric Pickles expects this change to provide a “Massive Impact” to boost the custom and self-build sector, making it cheaper to build an extension, a family annex or a “home of your own”.

Forecasters estimate that this policy change will save self builders and home extenders an average of around £15,000 per home.



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