Appraisal & Viability 08 min read

CIL vs Section 106: Key Differences

The Community Infrastructure Levy (CIL) and Section 106 planning obligations are the two main ways local planning authorities in England secure contributions from new development towards infrastructure and affordable housing. They work differently, cover different things and affect viability in different ways. Housing associations appraising schemes need to understand both.

SDS · Updated October 2026

What Is CIL?

CIL is a charge on new development, introduced by the Planning Act 2008 and implemented through the Community Infrastructure Levy Regulations 2010. It is optional: a local authority chooses whether to adopt a charging schedule, and not every authority has done so (Practical Law; Eddisons). In London, the Mayor also charges a Mayoral CIL alongside borough CIL.

CIL is charged per square metre of new floorspace, at rates set in the authority's charging schedule. Rates can vary by area and by type of development, and they are indexed each year, so the amount due depends on when planning permission is granted. Liability is fixed by the permission and becomes payable once development commences, either in full or by instalments under the authority's instalment policy.

CIL is set in advance, after independent examination of the charging schedule, and it is not negotiated scheme by scheme.

Reliefs and exemptions

Affordable housing is not usually zero-rated. Instead, it qualifies for relief:

Social housing relief is mandatory and gives full relief for qualifying dwellings, such as most social rent, affordable rent and intermediate rent homes provided by a local authority or private registered provider, and shared ownership homes, under Regulation 49 (West Berkshire Council). Some authorities also offer discretionary relief for other affordable tenures, such as discount market sale (Maidstone Borough Council).
Charitable relief applies where a charity owns a material interest and the development will be used wholly or mainly for charitable purposes.
Exceptional circumstances relief is discretionary, available only where the authority has published a policy, and intended for genuinely exceptional cases (Exeter City Council).
Exemptions cover self-build homes, residential extensions and annexes.

Relief has to be claimed and granted before development commences, otherwise the full charge becomes payable (Maidstone Borough Council). Housing associations should build the claim into the pre-start programme.

What is Section 106?

Section 106 agreements, also called planning obligations, are legally binding commitments made under Section 106 of the Town and Country Planning Act 1990. They are usually agreed between the planning authority and those with an interest in the land, though they can also be given as a unilateral undertaking. They are separate from planning conditions: the National Planning Policy Framework (August 2026) says obligations should only be used where an impact cannot be dealt with by a condition (NPPF, policy DM6).

Obligations are specific to each scheme and must meet the statutory tests in Regulation 122 of the CIL Regulations 2010: necessary to make the development acceptable in planning terms, directly related to it, and fairly and reasonably related in scale and kind.

Section 106 is the main route for securing affordable housing from private development. CIL receipts cannot be spent on affordable housing, so a planning authority that wants affordable homes from a development secures them through Section 106.

Key differences

	CIL	Section 106
Legal basis	Planning Act 2008; CIL Regulations 2010	Town and Country Planning Act 1990, s106
Where it applies	Only where the authority has adopted a charging schedule	Any authority, scheme by scheme
How the amount is set	Fixed rates per m², set in advance and indexed annually	Agreed for each scheme against plan policies and the Regulation 122 tests
Form	Money only	Money, land, works, homes or other actions
Purpose	Infrastructure to support development of the area	Mitigating the impacts of a specific development, including affordable housing
Affordable housing	Cannot fund it; qualifying affordable homes receive social housing relief	The main mechanism for securing it
Scope for adjustment	Fixed, apart from formal reliefs and exemptions	Can be reduced only where a viability case is accepted under NPPF policy DM5

The two operate together: a scheme can pay CIL and be bound by a Section 106 agreement at the same time (Savills).

CIL and development viability

CIL is a development cost and belongs in the appraisal from the first land assessment. Where rates are high it can affect viability materially, especially on schemes with a large open market element.

For housing associations, the CIL position depends on the tenure mix. Homes that qualify for social housing relief pay nothing once relief is granted, so a scheme made up entirely of qualifying affordable homes may have little or no liability. Market sale homes, and affordable tenures that do not qualify for mandatory relief where the authority offers no discretionary relief, carry the full rate.

Common errors include:

using an out-of-date rate, because rates are indexed each year and charging schedules are revised;
assuming relief will apply without checking the tenure meets Regulation 49 or the authority's discretionary policy;
missing the deadline to claim relief before commencement, which makes the full charge payable;
forgetting the Mayoral CIL on London schemes.

Savills notes, for example, that annual indexation has pushed up CIL charges in parts of the South West, adding to development costs there (Savills, Why more developers are turning to 100% affordable housing schemes in England's South West).

Pooling restrictions: removed in 2019

Regulation 123 of the CIL Regulations once prevented authorities from pooling more than five Section 106 contributions towards the same item of infrastructure, and from using Section 106 to fund infrastructure that CIL was already funding. The aim was to push authorities towards CIL for strategic infrastructure.

Those restrictions no longer apply in England. The Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2019 repealed Regulation 123 from 1 September 2019, ending the pooling restriction and the bar on funding the same infrastructure through both CIL and Section 106. Regulation 123 infrastructure lists were replaced by annual infrastructure funding statements (K&L Gates). All local authorities, including those that do not charge CIL, must now publish a statement by 31 December each year (Local Government Lawyer).

For housing associations, infrastructure funding statements are a useful source: they show what an authority has collected and spent through CIL and Section 106, and its priorities for future contributions.

The Infrastructure Levy

The Levelling-up and Regeneration Act 2023 created powers for a new Infrastructure Levy, intended to replace CIL and much of the Section 106 system. The government has decided not to implement it. In answers to parliamentary questions in October 2024 and June 2025, housing minister Matthew Pennycook confirmed that the government would not implement the Infrastructure Levy as introduced in the 2023 Act and would instead focus on strengthening the existing system of developer contributions (Parliamentary written answer, October 2024; June 2025).

CIL and Section 106 therefore remain the system in England. Proposals for a single developer levy continue to surface in political debate, but none is policy or legislation (Planning Geek, October 2026). Housing associations should watch for any government announcement on strengthening the existing system.