For those reading the previous blog post and wanting know more about our CIL experience mentioned, here’s our “things to watch out for during purchasing” entry. Hopefully through sharing we can save someone time and a significant increase in gastric acid. For those that are of a delicate nature, it all turns out ok in the end.
As mentioned in earlier posts, our house was considered to be two flats (“non-self-contained” as they shared an entranceway and hall) with the residents paying separate utility bills and council taxes. Luigi confirmed this with the council and it later necessitated a Change of Use application. Right after we completed the sale, he also registered at the council to suspend the council tax charges while the house was unoccupied. With this, a CIL double-whammy was unwittingly set off and in early December we were quietly told via our designer that we had a CIL bill of £64,020. After setting the screen resolution to heavily magnified and a few phone calls to verify that nobody’s email had been hacked, Luigi began turning into an Italian version of the Hulk (no shirts were ripped). Hammering a laptop, he swotted up on CIL legislation and within a week became a relative expert on its interpretation and various associated types of bloody mindedness.
Specifically – we learned for our case that converting two-flats-to-a-single-house had invoked the CIL laws as they were being interpreted when they assessed our property and at that point in time – presumably also given the right star constellations, mood music and a set of 3D glasses. From a pure logic perspective this argument really grinds my teeth as, when we argued our case with them, the reverse (converting a single-house-to-two-flats), did not invoke their flavor of CIL.
Now really, CIL-People, lets take a closer look at what you were saying:
One house converting to two flats
= two families
= more wear and tear on infrastructure provided by the Council.
Ergo, “Council Infrastructure Levy” could theoretically apply.
Two flats converting to one house
= one family (in our case, plus two cats)
= reduction in the amount of infrastructure usage for that address.
On what planet does that create a cost for increased infrastructure services? Admittedly one of our cats is on the larger scale for the species, but he doesn’t drive a car.
Now that I am in full rant – I want to highlight that the wording in the notification letter (see image) was particularly hokey. As it was really early days of CIL, no one could tell us what it actually meant as no-one had experience of it. You can see the paragraph saying:
“… CIL will be payable on all developments … involving an increase in net floor-space of over 100m2 or involving the creation of a new residential unit”.
We interpreted that to mean that if you increased floorspace over 100m2 (eg: with a large add-on building) or if you built another residence (like, flats or another house or ten) where other families could move in, then you would be CIL liable – because of the additional infrastructure requirements for higher residential saturation.
According to the initial interpretation by the council, moving two flats to one residence meant you were making a “new residence”. It was not considered a collapse of two-to-one, or a russian-doll equivalent transformation. Fundamentally it was considered a “new dwelling” and from a CIL perspective, the same as building a spanking new, huge, 100-floor, multi-tenant development on the plot. We disagreed. Luigi hulked successfully in debating this so it meant we were non-CIL liable (he’s on the hook for a posting so will leave him to explain the details of how).
The second part of the whammy was the six-month non-occupancy of a CIL-liable development (linked to suspending the council tax). The Council contacts stoically pointed out the clause that if a CIL-liable property contains a building that is unoccupied for more than 6 months, it is liable for extended CIL charges – the charge is calculated against the whole building, not just any net additonal space from extensions. In our case they even included the cellar measurements in the calculation, although it has a dirt floor and a 1.2m head clearance. Also, the CIL liability is invoked as soon as work on the site starts. The bit that tripped us up (well, beyond the whole CIL construct) was that although the house purchase had completed in in October, the previous occupants had also applied for the payment suspension months earlier– so by December the place was over the ‘6 month empty’ mark.
It didn’t apply to our case (almost, but not quite) but I daresay some other poor bugger will hit this the day of completion – and find out when they start works – because they’ve unknowingly bought a longer-term unoccupied property.
Before you ask, we hadn’t started works before planning was approved but we had started stripping out some of the plasterboard to see the extent of the damp problem/s. The Planning Officer who inspected the property decided that counted as “work started” and kicked it all off, even after discussing site activities with our builder and designer. I must send her a card.
Several million emails, phone calls and reviews of the legislation later, it was acknowledged that we (a) hadn’t started works and (b) weren’t liable for CIL anyway even if we had – there is a “Minor Development Exemption” in the regulation where “the chargeable development [does not] “comprise one or more additional dwellings”.
Not to over-tout Luigi but on this occasion he was pretty spectacular. He successfully debated the legislation interpretation by the council – using the legislation itself – that multiple-dwelling-to-single-dwelling conversions should not be considered “new dwellings”. Therefore our development qualified under the Minor Development Exemption, and was not CIL liable (hooray!) Particularly satisfying was the final comment from the council that on the basis of the definition for our house, the Planning Applications Committee would review other similar applications they were reviewing along with ours.
Lessons learned: find out from the Council upfront if the property you are looking at is CIL liable – both now and if there is anything involving Change of Use; and if the place is empty on purchase find out what the status and duration of non-occupancy is (just in case!).
Now I need a cup of tea.