RICS index sees London mayoral CIL rates fall

Charging rates for the London Mayoral Community Infrastructure Levy (MCIL) have fallen in 2020, the first year in which a new Royal Institution of Chartered Surveyors (RICS) index has been applied.

Crossrail: Mayoral CIL used to fund project. Image: Flickr / Sludge G
Crossrail: Mayoral CIL used to fund project. Image: Flickr / Sludge G

Changes to Community Infrastructure Levy (CIL) regulations last year included a stipulation that charging authorities should apply a new index of inflation prepared by the RICS.

According to the latest CIL Rate Summary published by mayoral agency Transport for London, application of the RICS index has resulted in a small reduction in CIL charges for developments granted planning permission in the 2020 calendar year.

MCIL has been charged on all developments granted permission in London since April 2012. The levy has been used to raise money to pay for the Crossrail project and is charged by boroughs in addition to local levies.

MCIL1 was superseded by MCIL2 in April 2019, which aims to pay for Crossrail Two. MCIL2 introduced charges ranging from £25/square metre to £80/square metre in three geographic bands plus higher rates for office, retail and hotel in central areas and the Isle of Dogs. Health and education developments are charged at a nil rate.

The latest rate summary shows MCIL2 rates in 2020 have fallen from £80/square metre to £79.52/square metre in the most expensive band and from £25/square metre to £24.85/square metre in the least expensive.

Though MCIL1 rates no longer apply to any permission granted after April 2019, they would still be used for amendments to consents granted before that date.

In NovemberRICS published the first government-backed annual bespoke index number for the purposes of calculating Community Infrastructure Levy (CIL) rates that are "responsive to market conditions".

This year’s index number is 334. It will be applied when councils calculate CIL liability using the government’s published mathematical formula.

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