From the 1 October 2026, the Building Safety Levy will apply to all development schemes in excess of 10 dwellings, including purpose-built student accommodation, not just tall buildings.
The Building Safety Levy is a tax on new residential buildings (including conversions). It will be collected by local authorities and the income raised will contribute to fixing building safety defects across England.
The draft regulations have now been put before government and guidance has been produced on the implementation of the regulations. In this article, we summarise the main points arising from the regulations and guidance.
Key takeaways from the draft regulations
| Levy payable |
A levy per square meter of gross internal floor area is to be paid on developments that include residential units – regardless of whether they also contained commercial or other non-residential elements. The levy will vary depending on the local authority but, by way of example, rates for the following local authorities: Somerset
East Devon
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| Exemptions | Exemptions exist for affordable housing, care homes, school accommodation, almshouses and social welfare accommodation and are a number of other specific exemptions listed in Schedule 1 of the regulations. |
| Timings |
When submitting an application for building control approval for works for new dwellings (or bedspaces of PBSA), relevant information must be provided. The levy must be paid before the local authority will issue the final building control certificate. |
| Enforcement | The local authorities will have powers to impose penalties for late payment, pursue unpaid levies through courts and register charges against properties where levies are outstanding. |
Impact
These proposals will have both a viability impact on developers and an administrative burden on local authorities. The additional costs to developers are likely to end up being an additional cost to house buyers. Developers should be considering the costs of the Levy in their appraisals and contracts at an early stage.
It is clearly important to ensure that all existing residential buildings are safe for their occupants, however, I do feel that at a time where there is a housing crisis and local authorities are already significantly under resourced, these additional regulations may slow down the delivery of housing targets.
What's next?
The draft regulations will go through government approval before they come into force, but developers should be aware that for any application submitted for building control approval relating to residential dwellings of 10 or more units (or purpose-built student accommodation in excess of 30 bedspaces) after 1 October 2026 the new Levy is expected to apply.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
