Dispelling the Myths of the Community Infrastructure Levy: Part 2

In our series on the Community Infrastructure Levy, this is part 2 - Reliefs and Exemptions.

As explained in our first article in this series, the Community Infrastructure Levy (CIL) allows local authorities to charge developers to fund infrastructure. The Community Infrastructure Levy Regulations 2010 (‘CIL Regulations’) allow for various reliefs and exemptions, but the regime is strict. If you fail to follow the rules precisely, these can be lost, and the CIL bill can be substantial.

Some reliefs and exemptions are mandatory; others are discretionary. Available reliefs and exemptions include:

• Minor development exemption
• Residential annexe or extension exemption
• Mandatory and discretionary charitable relief
• Mandatory and discretionary social housing relief
• Self-build exemption (whole house)
• Exceptional circumstances relief

These reliefs and exemptions are not available where permission is sought for development retrospectively: Gardiner v Hertsmere Borough Council [2022] EWCA Civ 1162.

Each relief and exemption has its own eligibility criteria and process. This article focuses on the self-build exemption, an area where people building their own home are regularly caught out.

See our Registered Provider Team Insights for a separate update on the social housing relief.

Why the Self-Build Exemption is Risky

The self-build exemption applies where someone builds or commissions the construction of their own home and then occupies it as their sole or main residence for at least three years after completion (the clawback period).

The CIL Regulations leave key concepts poorly defined, including:

• What it means to “commission” a dwelling
• Whether land must be owned by the person claiming exemption at the time of the build contract
• Whether off-plan purchases can qualify

The answer to each question depends on the facts, so professional advice is strongly recommended.

Procedure

To claim the self-build exemption, every procedural step must be followed:

1. Assume CIL liability before commencement
2. Submit a self-build exemption claim to the council before commencement, using the correct form (Form 7 – Part 1) with all required information. Do not start work until the collecting authority confirms its decision in relation to your claim
3. Serve a commencement notice no later than the day before works begin (failure to do so makes you potentially liable for a surcharge)
4. Submit confirmation of self-build completion within 6 months of completion (Form 7 – Part 2)

Failure to follow the process carefully can result in the exemption being unavailable or lost.

Don’t Miss the Part 2 Form

Claiming the self-build exemption doesn’t end when construction starts. The Part 2 confirmation form (step 4 above) requires specific documentary evidence within 6 months of issue of a Building Regulations completion certificate, showing that:

• the dwelling was completed as a self-build, and
• it will be occupied as the claimant’s sole or main residence.

Failure to submit the required documents will invalidate the original exemption, triggering a full CIL liability. This step is often overlooked, but it is critical. Completing the build is not enough — the exemption only survives if the second stage of the process is properly completed.

Take Responsibility

There is no duty on the collecting authority to notify would-be self-builders of this process. In Shropshire Council, R (On the Application Of) v The Secretary of State for Communities and Local Government [2019] EWHC 16 (Admin), the High Court held:

No system of administration could survive a duty imposed on a recipient of an email on one subject to remind its sender of all other notices on different subjects that he might want to send.

Disqualifying Events

Even after the exemption is granted, it can be revoked if:

• The property is sold or let within 3 years
• The claimant stops occupying it as their main residence

If such a disqualifying event occurs:

• The collecting authority must be notified within 14 days
• Full CIL becomes payable
• Surcharges apply if notification is missed

A Sale During Build Can Trigger Liability

In R (Luck) v Bracknell Forest BC [2025] EWHC 2984 (Admin), the High Court confirmed that the self-build exemption can be lost before the home is completed. In this case:

• Mr Luck claimed self-build exemption and commenced the development
• He sold the site mid-construction to a developer
• He did not notify the collecting authority or transfer CIL liability

The court held that the sale was a disqualifying event, even though the three-year occupation period had not yet begun. The exemption was lost, and the original claimant remained liable for CIL.

Further Process if you Amend Your Permission

If a planning permission for a self-build project is amended under section 73 of the Town and Country Planning Act and the amount of the exemption has not changed, it is possible to apply to have the exemption transferred over to the 'amended' planning permission, using Form 13.

Where the value of the exemption or relief has changed, a new claim for a new exemption or relief needs to be submitted, following the procedure outlined above.

Key Takeaways

• Procedural errors, early sales, changes in ownership before expiry of the clawback period can all trigger a full CIL charge for self-build projects.
• If you are considering a self-build, specialist advice at the outset is essential.

Contact our legal experts