CIL and Section 106: What Homeowners Need to Know

Introduction

Community Infrastructure Levy (CIL) and Section 106 agreements are two mechanisms by which local planning authorities require developers — including homeowners — to contribute financially to local infrastructure when they obtain planning permission for new development. Most homeowners undertaking extensions or loft conversions in NW3, NW5 or NW11 will not encounter CIL, because the levy typically does not apply to works that do not create new dwellings. But homeowners who are adding an annex, converting a property into flats, building a new dwelling in the garden or undertaking a more substantial new-build project will need to understand both mechanisms. Failing to pay CIL when it is due — even through ignorance — results in surcharges and enforcement action. This guide explains both mechanisms in plain language. For broader planning context, see our guide on planning permission in Camden.

Community Infrastructure Levy (CIL)

What Is CIL?

The Community Infrastructure Levy is a charge levied by local planning authorities on new development to fund infrastructure — roads, schools, parks, community facilities. It is calculated per square metre of new floor area created by a development. Not all development types attract CIL, and the rate varies by borough and by type of development.

When Does CIL Apply to Homeowners?

CIL applies to any development that creates a new dwelling (including a self-contained annexe), creates new floorspace of more than 100m², or changes the use of a property in a way that increases its floor area. For most homeowners extending their homes — adding a rear extension or a loft conversion — CIL does not apply because the works do not create a new dwelling and do not add more than 100m² of new gross internal area in a single permission. However, if you are:

• Building a new dwelling in your garden (e.g., a mews house or garden annexe)
• Converting a property into two or more flats
• Adding a self-contained annexe with its own kitchen and bathroom
• Extending by more than 100m² (uncommon for domestic projects but possible for larger properties)

…then CIL is likely to apply and you should budget for it from the outset.

CIL Rates in Camden and Barnet

CIL rates vary by borough and by zone within the borough. In Camden, residential CIL rates typically range from £0–£450 per m² of new gross internal area, depending on the location. Some parts of Camden (including parts of the Hampstead area) attract higher rates because of the high land values. In Barnet, rates are lower — typically £0–£180 per m². Your architect or planning consultant can confirm the applicable rate for your specific site.

CIL Exemptions for Self-Build and Owner-Occupiers

There is an important exemption from CIL for "self-build" development. If you are building your own home (or a residential extension to your own home) and you intend to occupy it as your principal residence for a minimum of three years, you can apply for a self-build exemption. This exemption must be applied for before development commences — it cannot be applied for retrospectively. If you sell the property within three years of completing the development, the exemption is clawed back and the full CIL charge becomes payable immediately.

The CIL Process

1. When you receive planning permission, the council will issue a Liability Notice stating the CIL charge.
2. If you are eligible for an exemption, you must apply for it before starting work.
3. You must submit a Commencement Notice to the council before starting work on site.
4. CIL is payable in instalments — typically 60 days after the Commencement Notice for the first payment.
5. If you fail to submit the Commencement Notice before starting work, a surcharge of 20% is automatically applied.

Section 106 Agreements

What Is a Section 106 Agreement?

A Section 106 agreement (also called a planning obligation) is a legal agreement between the developer and the local planning authority, negotiated as part of the planning application. Unlike CIL, which is a standardised charge calculated by formula, Section 106 agreements are negotiated on a case-by-case basis and cover site-specific obligations. Common obligations include:

• Affordable housing contributions (for larger residential developments)
• Highway improvements or transport contributions
• Ecological mitigation and habitat management
• Public open space contributions
• Employment and training contributions

When Does Section 106 Apply to Homeowners?

Section 106 agreements are most common for larger residential developments — typically 10 or more new dwellings. For homeowners extending their homes, converting properties into two or three flats, or building a single new dwelling, Section 106 obligations are unusual. However, in Camden and Barnet they can occasionally be required for:

• Conversion of a large family house into multiple flats (where Camden's policies on family housing loss may require a financial contribution)
• New-build dwellings on infill plots (where a transport contribution may be sought)
• Any development that requires highway works or service connections

If a Section 106 is required, it must be agreed and signed before the planning permission can be issued. The cost and time implications are real. See our guide on new build and infill development for more on this in the Hampstead context.

Budgeting for CIL and Section 106

For most homeowners in NW3, NW5 and NW11 undertaking straightforward extensions or loft conversions, CIL and Section 106 do not apply. But if your project involves creating a new dwelling (including an annexe), converting to flats or building at a larger scale, you must factor these costs into your budget from the very beginning.

Conclusion

CIL and Section 106 can add significant costs to projects that create new dwellings or add large amounts of new floor area. For straightforward domestic extensions and loft conversions, they are rarely applicable. But for homeowners venturing into annexes, flat conversions or new-build projects, understanding these obligations early — before the planning application is submitted — is essential. Always raise the question with your architect at the outset, and ensure the Liability Notice from the council is reviewed before any work starts. Use our free matching service to find an architect experienced in navigating CIL and planning obligations for north London projects. Detailed pre-application guidance is available at planninghampstead.co.uk.