22nd December 2014

Section 106 payments axed for small developments and self-builds

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22nd December 2014

Section 106 payments axed for small developments and self-builds


As part of the Government’s latest planning reforms aimed at boosting the economy and providing incentives for self-builders and small scale developers, it has introduced a new threshold for S106 payments. As of 28 November 2014, financial contributions for affordable housing and other “tariff-style” contributions can no longer be sought for the following types of developments:

  • Developments of 10 units of fewer (including self-build) which have a maximum combined gross floor space of no more than 1,000 sqm
  • Developments of 5 units or fewer in designated rural areas where the local planning authority chooses to implement this lower threshold. (NB the maximum floor space threshold does not apply to the 5 unit threshold)
  • Any development consisting only of the construction of a residential annex or extension to an existing home.

For developments of 6-10 units in designated rural areas where the 5 unit threshold is implemented, payment of Section 106 contributions will be sought in cash (rather than in kind) and will be deferred until after completion of the units within the development.

However, even where the new thresholds apply, Local Authorities can still require obligations for site-specific infrastructure (eg footpath/cycle links, road access improvements).

Community Infrastructure Levy (CIL) payments will not affected by this change.