Property developers in England should budget separately for Community Infrastructure Levy (CIL), Section 106 obligations, biodiversity net gain (BNG) and, for qualifying projects entering building control from 1 October 2026, the Building Safety Levy. These costs should not be hidden in a general planning-cost percentage because each has different calculations, evidence requirements, payment triggers and programme risks.
For the wider construction budget around a qualifying residential scheme, see our guide to building a block of flats.
England and date note: This guide covers the position in England and was checked against official guidance on 14 July 2026. Local charging schedules, planning agreements and project facts determine the actual liability. Confirm the current position with the relevant authority and suitably qualified advisers before committing to land, finance, commencement or occupation dates.
A sound appraisal keeps these obligations separate from the measured construction scope and records what is known, what is provisional and who must confirm it.
What property developers should allow for beyond the build cost
Community Infrastructure Levy (CIL)
A locally set infrastructure charge where the authority has adopted a charging schedule. Development creating at least 100m² of net additional floorspace is generally potentially liable, and a new dwelling can be liable regardless of size. The statutory calculation, local indexed £/m² rate, relief procedure, commencement and instalment policy determine the amount and timing. See the official CIL guidance.
Section 106
A site-specific package of legally binding planning obligations that can apply alongside CIL. It may be agreed with the local planning authority or given by unilateral undertaking. There is no national rate: the heads of terms and final obligation determine the cash contributions, works, affordable housing requirements, indexation and triggers. See the planning obligations guidance.
Biodiversity net gain (BNG)
Most in-scope permissions must deliver at least 10% BNG, although local policy may require more. The budget may need to cover ecology, habitat works, land, legal security, off-site units and long-term management. Survey, design and gain-plan approval can also hold up commencement. See the official BNG guidance.
Building Safety Levy
Not yet in force. It is due to start on 1 October 2026 for qualifying major residential development entering building control from that date. It is a local £/m² charge on relevant residential GIA and must be settled before completion or occupation, whichever comes first, and before certification. Submission date, floorspace, exemptions and discounts all require checking. See the official levy guidance.
CIL: check the charging schedule before relying on the appraisal
CIL exists only where the charging authority has adopted a schedule. Rates vary by area, use and scale; London projects may face borough and Mayoral CIL. There is no defensible national-average allowance.
A working appraisal often starts with chargeable net additional GIA multiplied by the indexed rate. Existing floorspace is not automatically deductible: the statutory Schedule 1 calculation and evidence rules apply. Where the lawful-use test is relevant, the building must generally have been in lawful use for a continuous period of at least six months during the three years ending on the day planning permission first permits the chargeable development. The detailed treatment depends on retained, demolished and zero-rated floorspace. Since 2020, indexation has used the annual RICS CIL Index.
Reliefs and exemptions are not automatic. Record the charging authority, schedule version, use, net additional GIA, existing-floorspace basis, indexed rate, relief status and evidence.
After planning permission is granted, the authority normally issues a liability notice. Before the chargeable development starts, liability should be assumed and a valid commencement notice submitted no later than the day before commencement. The authority then issues a demand notice stating the amount and payment date. If liability has been assumed, a valid commencement notice has been submitted and no instalment policy applies, payment is normally due 60 days after the intended commencement date. If nobody has assumed liability, it can default to the landowners and payment may become due on commencement; the benefit of an instalment policy may also be lost. Premature commencement can withdraw relief, trigger surcharges or accelerate payment.
Section 106: cost the agreement, not the label
A Section 106 allowance must be built from the site-specific heads of terms, agreement or unilateral undertaking because there is no national rate. Include cash contributions, affordable housing, works, land transfers, indexation, monitoring, legal costs and the payment or delivery trigger for each obligation.
The obligations must be necessary to make the development acceptable in planning terms, directly related to it, and fairly and reasonably related in scale and kind. Within those tests, the actual package remains site-specific.
Break the heads of terms into separate lines: cash contribution, affordable housing delivery or commuted sum, land transfer, site-specific infrastructure, education or open-space provision, mitigation works, indexation, monitoring fees and legal or professional costs. Monitoring fees should be proportionate, reasonable and reflect the authority’s actual monitoring cost. Record each trigger, whether signature, commencement, occupation or a unit threshold, and the party responsible.
Keep Section 278 highway works separate. Combining them with Section 106 hides design, bond, approval and delivery responsibilities. Allow time for negotiation, drafting, lender and landowner comments and execution. The government’s Section 106 delivery roadmap, updated on 24 March 2026, has not replaced the statutory framework or created a general right to reduce obligations. Its emergency affordable-housing expectation is conditional.
BNG: allow for ecology, land, legal security and 30-year delivery
Mandatory BNG generally applies to in-scope planning permissions where the planning application was made on or after 12 February 2024, or on or after 2 April 2024 for small developments. Applications made before the applicable date remain outside mandatory BNG, and transitional rules can affect later variations of an earlier permission. In-scope schemes must normally achieve at least 10% using the statutory biodiversity metric. The biodiversity gain condition is not satisfied by showing landscaping on a planning drawing: a biodiversity gain plan, supported by the metric calculation, must be approved before development starts.
Build the allowance from its components: habitat survey and metric work; ecology and design input; on-site habitat work; loss of developable land; management plans; legal security; off-site units; and monitoring. Significant on-site enhancements and all off-site gains require commitments for at least 30 years. Off-site gains also need registration and allocation.
Under the rules applying on 14 July 2026, the biodiversity gain hierarchy requires relevant adverse effects on on-site habitat to be avoided where possible, then mitigated. Required gains are generally delivered on-site before registered off-site gains are used, with statutory biodiversity credits as a last resort. Different sequencing flexibility begins for qualifying small developments on 6 August 2026. Statutory credit prices include a mark-up intended to avoid undercutting the private market and are not a proxy for private off-site biodiversity-unit prices.
Rules changing on 6 August 2026
At 14 July 2026, the de minimis exemption may apply where development affects less than 25m² of on-site area habitat and less than 5 metres of on-site linear habitat, provided it affects no on-site priority habitat and the other official conditions are met. The qualifying self-build and custom-build exemption also remains available for applications made before 6 August 2026.
For applications made on or after 6 August 2026, that exemption ends and a new exemption may apply where the entire red-line site is 0.2 hectares or less, subject to the official conditions and the restriction concerning on-site priority habitat. A separate exemption may apply where the whole development is temporary, permission is for no more than five years and the habitat-restoration conditions are met. Qualifying non-exempt small developments also gain more flexibility to consider on-site and off-site gains together, although statutory credits remain a last resort.
Do not apply the new rules early. Check the application date, red-line area, habitat evidence and transitional position. Mandatory BNG for in-scope nationally significant infrastructure project DCO applications is scheduled to begin on 2 November 2026.
Building Safety Levy: in-scope submissions from 1 October 2026
The Building Safety Levy is not yet in operation. The made regulations set a start date of 1 October 2026. Minor amending regulations laid on 2 July 2026 were still subject to Parliamentary approval when this guide was checked, so the position should be rechecked before submission.
The core threshold is major residential development: at least 10 new dwellings or 30 new purpose-built student accommodation bedspaces. Splitting building-control applications does not necessarily avoid it; a smaller application can form part of a chargeable major development under the relevant planning permission or planning application. Qualifying conversions, changes of use and extensions creating new residential floorspace can also be caught.
Rates vary by local authority and apply per square metre of chargeable residential GIA. There is no single national rate. Qualifying previously developed sites receive a 50% discounted local rate, but the official definition and 75% red-line test must be satisfied. Do not call a site “brownfield” from appearance alone. The regulations distinguish exempt persons, exempt dwellings and excluded accommodation, and their information and notice consequences are not identical. Mixed schemes require chargeable, exempt and excluded floorspace to be identified correctly, including the prescribed apportionment of relevant shared communal areas.
The relevant date is the building-control application or initial notice, not planning permission. A rejected pre-October submission resubmitted on or after 1 October 2026 may therefore become liable. The client named in the submission is responsible for the levy process, even if that party is not described contractually as the developer.
After the first commencement notice supplies the calculation information, the normal period for a liability or no-charge notice is five weeks, or eight weeks for a spot check, on local-authority and registered-building-control-approver routes. The Building Safety Regulator periods are seven and ten weeks. Extensions and requests for further information can alter those periods. Allow for this administration and for payment before completion or occupation, whichever comes first. The whole charge must also be paid before a completion or final certificate can be issued or accepted for any of the works covered by the application.
Put the obligations into the cost plan and programme
Give each obligation one of four clear statuses:
- Known amount: supported by a notice, executed agreement, authority calculation or accepted quotation.
- Provisional allowance: a calculation is possible, but an input such as GIA, tenure split or indexed rate is not final.
- Risk allowance: liability or scope is plausible but has not been confirmed.
- Excluded pending verification: named clearly, with an owner and decision date.
For each line, show the amount, basis, source document, payment trigger, programme dependency, responsible person and last-checked date. Lenders and equity partners can then see which sums are evidenced, which may move and when the cash is required, rather than finding a single unexplained contingency. For the wider appraisal context, see development finance and construction cost planning and the guide to common cost gaps in small developments.
What a construction estimate can and cannot settle
Keep authority- or client-supplied CIL, Section 106, BNG and Building Safety Levy figures outside the priced construction work, with their source and status stated. Otherwise an appraisal can make an unverified allowance look as firm as a measured trade cost.
Cost Estimator can clarify and price the construction scope, but liability and statutory calculations remain with the relevant authority and appointed planning, legal, ecology or building-control advisers. Our developer estimating support can proceed while those items are being confirmed, provided the outstanding assumptions and exclusions are explicit.
Get the construction cost onto a firm basis
Send the drawings, specification and any available planning or obligation documents. We will price the supplied construction scope, state the material assumptions and exclusions, and identify any external cost lines that remain provisional. That gives the appraisal a defensible build-cost figure without presenting unverified statutory obligations as measured work.
Choose Upload Plans when the drawings, scope or obligation documents need review. Choose Quick Quote when the estimating requirement is already defined and the information is ready.
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Frequently asked questions
Does the Building Safety Levy apply to applications submitted before 1 October 2026?
Applications or notices submitted before the start date are outside the levy in the circumstances described by official guidance. A rejected application resubmitted on or after 1 October may be liable, so verify the exact submission history.
Can the Building Safety Levy affect a scheme below 10 homes?
Potentially. A building-control application for fewer than 10 homes may form part of a major residential development where the underlying planning permission or planning application meets the threshold.
When must the Building Safety Levy be paid?
Payment is required before completion or occupation, whichever comes first. The full levy charge for the relevant application must also be paid before a completion or final certificate can be issued or accepted for any of the works covered by it.
What should be provisional in an early development cost plan?
Anything calculable but not yet final—for example chargeable GIA, an indexed rate, tenure split, heads-of-terms contribution or off-site BNG unit requirement. State the basis, missing input, owner and deadline for confirmation.
