NaCSBA can claim a major success in its efforts to help self builders across the UK with news announced by DCLG today. People building their own homes will now be exempt from Section 106 payments to local authorities, the Communities Secretary Eric Pickles announced. The exemption, originally announced back in February, will come into force immediately and could affect hundreds of self builders currently going through the planning process.
Section 106 Agreements are designed to provide financial benefits for the local community from the granting of planning permission and have traditionally been used to extract incentives from developers. They may take the form of new playgrounds, road crossings and even schools, depending on the size of the development. In recent years, however, many one-off self builders have found that local authorities are demanding a payment under a 106 agreement before granting planning approval – often in the £1,000s. In one case a self builder was charged £140,000 (in Dorset) to build their own home.
Eric Pickles said: “This will also be a massive boost to the self build and custom build sector. Overnight in many parts of England, it will be cheaper to build an extension, a family annex or just build your own home.”
Our Chair, Michael Holmes: “This is a massive boost for self and custom build in this country. To effectively tax people wishing simply to provide a home for their family with none of the profit motive enjoyed by developers was always, in our opinion, a misuse of Section 106s. We can expect to see many more self builds start as a result of this announcement.”
Personally, I believe that this is positive news. In other countries they incentivise people to build their own homes. This exemption will be a major boost to the industry and means that we are back to the position we were in the mid 2000s when self builders were not taxed. The Government has been a major positive force for anyone wishing to create their own home.”
The exemption for self builders (and anyone building less than 10 units) will come into force immediately. The call to exempt self builders from Section 106 campaigned for by NaCSBA.