Key Points
- Croydon Council has brought to an end the 13-year “zero-rate” Community Infrastructure Levy (CIL) era for housebuilders working in the town centre.
- The planned CIL of £225 per square metre will apply to developers building 10 or more houses in the Croydon Metropolitan Centre.
- Developments involving nine homes or fewer will be subjected to a higher levy of £300 per square metre because of statutory affordable housing exemptions.
- It is expected that the council will earn about £112 million in residential CIL over the next five years, which is an increase by £77 million over the existing system.
- Reinstating the Croydon Metropolitan Centre in the charging system will result in earning about £69.5 million from projects that were previously exempt.
- The new revenue generated is expected to assist in bridging the infrastructure funding gap of £54 million in the borough, where the total need for the infrastructure development is £133 million up to 2040.
- Elsewhere in the rest of the borough, changes in CIL rates will also affect student accommodation projects, industrial and warehouse developments, business activities, and care homes, among other things.
Croydon (South London News) September 10, 2026 – Croydon’s Executive Mayor is moving to conclude a 13-year “zero-rate” taxation era for town-centre property developers. According to Harrison Galliven, a Local Democracy Reporter for MyLondon, the local authority has announced a comprehensive overhaul of its Community Infrastructure Levy (CIL) to ensure that future regeneration projects adequately support public services and local facilities.
How Will the New Community Infrastructure Levy Structure Work for Developers in Croydon?
Under the revised charging schedule brought forward by Croydon Council, developers planning major housing schemes of 10 or more homes within the Croydon Metropolitan Centre will be subject to a standard charge of £225 per square metre. As reported by Harrison Galliven of MyLondon, smaller developments consisting of nine homes or fewer will face a higher rate of £300 per square metre because these compact schemes are exempt from statutory affordable housing requirements and are deemed capable of absorbing the elevated cost. Meanwhile, individual residents building their own bespoke homes will remain entirely unaffected by the changes.
The alterations formally terminate a policy introduced in April 2013, when housing schemes located in the Croydon Metropolitan Centre were assigned a zero CIL rate. That historical exemption was implemented following widespread economic anxieties regarding the viability of urban development in the aftermath of the global financial crisis. Consequently, town-centre developers were absolved from paying the local authority’s CIL, though they remained obligated to contribute via Section 106 agreements and the Mayor of London’s separate infrastructure levy.
However, a fresh independent assessment commissioned by Croydon Council revealed that robust housing growth and soaring property values mean modern town-centre schemes can now comfortably afford to contribute financially toward community infrastructure.
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What Are the Broader Financial Implications and Borough-Wide Adjustments?
Beyond the town centre, the updated CIL schedule extends its reach to various other sectors across the wider borough. As detailed by Harrison Galliven of MyLondon, new rates will apply to student accommodation, industrial and warehouse developments, business uses, and care homes. Concurrently, the council has integrated targeted adjustments, such as cutting the proposed industrial and warehousing tariff from £50 down to £35 per square metre, alongside introducing a complete nil rate for non-profit community, sports, and leisure facilities.
Through these wide-ranging adjustments, Croydon Council anticipates capturing approximately £112 million in residential CIL revenue across a five-year timeline—surpassing the current yield framework by roughly £77 million. The reintegration of the Croydon Metropolitan Centre into the charging framework is projected to anchor this financial surge, single-handedly unlocking an estimated £69.5 million from sites that have enjoyed exemptions since 2013.
The local authority has stated that the influx of capital is critical to managing an existing £54 million infrastructure funding deficit. Total infrastructure requirements across the borough through to 2040 are presently calculated at £133 million, with £78 million already secured via internal and external revenue streams.
Addressing the policy shift, Executive Mayor Jason Perry stated:
“Regeneration must deliver for the people who already call Croydon home.”
As reported by Harrison Galliven of MyLondon, Mayor Perry further stated:
“We welcome new homes, businesses and investment, but it is only fair that developers contribute towards the roads, public spaces and community facilities that growth requires.”
Concluding his remarks regarding the long-term outlook of the municipal strategy, Mayor Perry stated:
“These updated charges strike the right balance: keeping Croydon open for investment while securing more funding for local infrastructure. Residents should be able to see and feel the benefits of development in their own communities.”
Background of the Particular Development
The decision to dismantle Croydon’s 13-year zero-rate CIL policy unfolds against a backdrop of prolonged financial turbulence and intensive urban evolution within the South London borough. Following the global financial crisis in the early 2010s, local authorities across the United Kingdom faced severe stagnation in the construction sector. To stimulate sluggish commercial and residential markets, Croydon Council established a zero-rate CIL zone across its central metropolitan district in April 2013, hoping to entice wary investors and kick-start high-density regeneration.
Over the subsequent decade, the central district witnessed a dramatic transformation marked by high-rise developments and shifting populations. However, this vertical expansion placed mounting pressure on legacy infrastructure, transport links, public spaces, and local amenities. Concurrently, Croydon Council encountered severe, well-documented institutional and financial challenges, culminating in effective bankruptcy declarations and strict fiscal oversight by government-appointed commissioners.
As property values within the metropolitan core rebounded and independent evaluations confirmed enhanced commercial viability, community stakeholders and local leaders faced mounting pressure to ensure incoming developers shared the burden of public service strains. The formal scrapping of the zero-rate threshold represents a structural pivot from growth-at-all-costs incentives to a recovery-focused model aimed at bridging severe capital shortfalls.
The termination of the zero-rate CIL era carries significant implications for property developers, local investors, and Croydon residents. For town-centre housebuilders and commercial property applicants, the immediate impact will be an increase in upfront capital expenditure, as profit margins absorb the newly mandated levies of £225 per square metre for large schemes and £300 per square metre for smaller developments. This additional financial requirement could prompt some developers to reassess the viability of marginal urban plots, potentially slowing the pace of speculative high-rise applications in the short term. Alternatively, it may compel developers to recalibrate their land-acquisition cost models to account for mandatory municipal contributions.
For the local community and existing residents, the policy shift holds the promise of tangible improvements to strained public infrastructure. If the council successfully delivers on its projection of raising £112 million over five years, neighbourhoods surrounding high-density developments could finally see targeted investments in local roads, green spaces, community centers, and public facilities that have historically lagged behind rapid population growth. Ultimately, the development tests whether Croydon can successfully balance its appeal as an investment destination against the urgent infrastructure demands of its established population.
