Croydon Council ends 13-year developer levy holiday

Croydon Council is proposing to end a 13-year 'zero-rate' era for developers building in the town centre. The change, which has been backed by an independent planning examiner subject to minor adjustments, aims to ensure that new developments contribute towards local community facilities and public services. The council hopes these measures will help tackle a £54 million shortfall in infrastructure funding across the borough.

New Levy Rates and Expected Income

Under the revised charging schedule, developers constructing 10 or more homes within Croydon Metropolitan Centre will be required to pay £225 per square metre. For smaller schemes comprising nine homes or fewer, a higher rate of £300 per square metre will apply. This distinction is based on the assessment that smaller developments are better positioned to absorb the increased cost, being exempt from statutory affordable housing requirements. Individual home builders will not be affected by these changes.

The council anticipates that these new rates will generate approximately £112 million over a five-year period. This represents a significant increase compared to the current system, which has seen no CIL contributions from town centre housing schemes since April 2013. At that time, a zero-rate was introduced due to concerns about development viability following the global financial crisis. The Croydon Metropolitan Centre encompasses the borough’s main commercial, retail, and high-density residential areas, including locations around the Whitgift Centre and East Croydon station.

Examiner's Recommendations and Next Steps

An independent planning examiner, Derek Stebbing, reviewed the council's proposals in February 2026. He recommended approval, contingent on two specific changes. These included reducing the proposed levy for industrial and warehousing developments from £50 to £35 per square metre, and establishing a nil rate for facilities operated by non-profit organisations for community, sports, and leisure purposes. The revised charging schedule is scheduled for presentation to the Streets and Environment Sub-Committee on September 15. Formal approval is expected from the Cabinet and Full Council later this year.

Mayor Jason Perry stated that the regeneration of Croydon must benefit existing residents. He commented, “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.” He added that the updated charges aim to maintain Croydon's attractiveness for investment while securing necessary funding for local infrastructure, ensuring residents experience tangible benefits from development.