Reduced Land Cost
While Estate Developers must pay Community Infrastructure Levy (CIL) on their development land (This could be tens of thousands of pounds, depending on the size of the house), providing planning application is made before development has commenced, Self-Build and Custom Self-Builders like you, who build or commission homes for your own use, can claim exemption.
However, to claim this exemption you must provide supporting evidence of this on completion of the build and retain the property as your principal residence for at least 3 years. Full details are set out here
What is CIL?
The Community Infrastructure Levy was introduced in April 2010, enabling local authorities in England and Wales to set a charge on most types of new development in their area. The CIL is a charge per square metre on new development. It is mandatory and Charging Schedules are set for each type of chargeable development.
How Much Is CIL?
Each charging authority sets its own levels of CIL charges, but for example as in Monmouthshire, typically these run from a low of around £60 to £120 per square metre, with a reasonable ‘norm’ of perhaps £80 per square metre of the new house that you build. This can be quite a lot. For example, at £80 /m2 if your house is, say:
150 m2 on all floors it would be £12,000
200 m2 on all floors it would be £16,000
250 m2 on all floors it would be £20,000
As you can see, it is well worth ensuring that you can claim this exemption.
Low or No Stamp Duty Development Land Tax (SDLT)
As a Self-Build and Custom Self-Builder, if you buy residential property for less than £125,000 you do not have to pay Stamp Duty on your land purchase or building cost. As of November 2017 if you are a first time buyer you may also be exempt up to £300,000. Further information is available here
Providing you follow the regulations , you can also reclaim VAT on new building work and materials. A (VAT Exempt) builder does not have to charge this.
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