‘Extension tax’ to help plug council cash gap

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Householders and businesses face having to shell out for large extensions and new builds to help pay for public projects in Dacorum.

The Community Infrastructure Levy could charge up to £250 per square metre (psm) on developments from March 2014.

Dacorum Borough Council’s cabinet has agreed to a public consulation on the proposed charges, which won’t apply to small residential extensions.

Under the plans, Dacorum would be split into three zones. Zone 1 would be Berkhamsted and surrounding areas, Zone 3 would cover Hemel Hempstead and Markyate and Zone 2 would be everywhere else.

Zone 1 would have the highest rate for residential development, £250 psm, and Zone 3 the lowest at £100 psm. Retirement housing would be charged at £125 psm and large shops £200 psm. Other developments would not be taxed.

Councillor Terry Douris, Dacorum Borough Council’s planning and regeneration supremo, said: “The charge will apply to the next increase in floorspace. Developments of the same size will not have to pay CIL.”

The council believes the CIL could bring in £2.9million a year for roads, schools and urban spaces although the funding gap for projects is put at more than £60million. Mr Douris added it was important the CIL wasn’t set too high as it might prevent developments happening.

Councils already have powers to charge large developments so-called Section 106 contributions for specific projects. CIL will be examined independently and be passed by the full council.