The previous charge added considerable cost in some cases to the expense of building a home. For example someone building their own four bedroom house that is 150 square metres in size would have had to pay £15,000 in community infrastructure levy if a council was charging £100 per square metre for residential development in that area.
The axing of the levy for people building their own home is part of the government’s determination to boost housing supply and help aspiring self builders get their home off the ground.
The relief from the community infrastructure levy will cover homes that are owner occupied and built or commissioned by individuals, families or groups of individuals for their own use.
‘Building your own home is always a challenge and we are doing what we can to help people realise their dream and provide a home for their family. This change will save self builders thousands of pounds and help many more in the future,’ said Communities Secretary Eric Pickles.
‘By boosting the numbers of people building their own home we can help increase the number of new houses built each year in this country and support local businesses. There are too many levies and charges on housing. By cutting these, we can help build more homes,’ he added.
Ted Stevens, chairman of the National Self Build Association, estimates that about one in eight self build projects has been mothballed over the last two years, because of the impact of the levy.
‘We anticipate the exemption will have a significant impact on self build starts, with 2,000 to 3,000 homes coming off the shelf, and starting on site in the next few months. This is good news for the people who want to build their own homes and it will also be good news for the supply chain and local construction related businesses that support the self build sector,’ he said.
Extensions and family annexes over a certain size will now be exempt from the levy and the government also intends to consult on removing Section 106 tariff charges from self build properties too. In addition from April there will no longer be a Council Tax surcharge on family annexes.
Pickles added that exempting self builders from the levy is the latest in a range of measures to boost the number of people building their own home. They include making is easier to get a self build mortgage. The government has been speaking to lenders and 26 of them are now offering self build loans. Gross self build lending is predicted to increase by almost half between 2012 and 2015 to £1 billion a year.
There is also the freeing up more surplus public sector land for self builders with the Homes and Communities Agency charged with bringing forward a range of sites for custom build homes.
A £30 million Custom Build Homes Fund makes available repayable finance for larger multi unit projects and grant funding for community self builders who can now apply for a share of £65 million from the Affordable Homes Guarantees Programme.
Also, planning guidance makes it clear councils should help self builders and establish demand in their area. This includes compiling a local register of people wanting to build a home so they have priority when new brown field sites become available.
