A technical amendment has been made that will give the Mayor of London an additional 10 years to be able to impose a Crossrail levy on property developers in London.
The Mayor’s Community Infrastructure Levy (MCIL) is imposed on property developers over a certain size to help fund the Crossrail project on the basis that such properties will increase in value when the railway opens.
Although the levy is raised across London, it rises in richer areas, and those closer to the railway.
When the Crossrail levy was introduced in 2010, it allowed the Mayor’s office to keep collecting the levy until the end of March 2033.
As part of the latest Crossrail funding round agreed to last December, the extra £825 million being provided by the government has to be repaid against future income, including the MCIL.
That required a statutory change, which has now been effected, to extend the levy by 10 years until the end of March 2043.
According to the explanatory memo, that should allow the Mayor to raise around £1 billion over the extra decade – compared to the £300 million already collected. As the funds are ringfenced purely for Crossrail, it’s possible that further down the line, the MCIL would be reduced or even cancelled if enough funding has been raised
The use of the extended MCIL for Crossrail 1 also makes it slightly harder to raise the money for Crossrail 2, as that had been expected to require developer funding from the 2030s onwards.