The Building Safety Levy (Scotland) Act 2026 (the Act) forms part of the Scottish Government's response to building safety concerns following the Grenfell Tower fire. The Act introduces a new devolved tax on residential developments in Scotland with revenues supporting the assessment and remediation of buildings with external wall cladding.
The levy is expected to raise up to £450 million over 15 years towards remediation costs estimated at between £1.7 billion and £3.1 billion. The policy rationale is that the residential development sector should contribute to those costs, rather than the burden falling solely on general taxation. The levy is not intended to be permanent – the Act provides for it to expire after 15 years unless extended.
Although the Act is now in force, key commercial details remain to be settled in secondary legislation. Part of this detail is the rate of tax and the Scottish Government has now published indicative rates which will allow developers to estimate their liability for the tax which will apply from 1 April 2028.
| Local authority | Brownfield rate* | Greenfield rate |
|---|---|---|
| Aberdeen City | £18.08/m² | £36.16/m² |
| Aberdeenshire | £12.11/m² | £24.23/m² |
| Angus | £13.48/m² | £26.96/m² |
| Argyll and Bute | £12.17/m² | £24.34/m² |
| City of Edinburgh | £24.23/m² | £48.46/m² |
| Clackmannanshire | £13.81/m² | £27.62/m² |
| Dumfries and Galloway | £11.58/m² | £23.17/m² |
| Dundee City | £14.70/m² | £29.39/m² |
| East Ayrshire | £12.15/m² | £24.30/m² |
| East Dunbartonshire | £19.60/m² | £39.19/m² |
| East Lothian | £17.41/m² | £34.82/m² |
| East Renfrewshire | £18.44/m² | £36.88/m² |
| Falkirk | £14.45/m² | £28.90/m² |
| Fife | £14.96/m² | £29.93/m² |
| Glasgow City | £19.02/m² | £38.04/m² |
| Highland | £13.73/m² | £27.46/m² |
| Inverclyde | £15.46/m² | £30.92/m² |
| Midlothian | £18.02/m² | £36.05/m² |
| Moray | £11.63/m² | £23.25/m² |
| North Ayrshire | £13.52/m² | £27.04/m² |
| North Lanarkshire | £14.73/m² | £29.46/m² |
| Perth and Kinross | £13.33/m² | £26.67/m² |
| Renfrewshire | £16.17/m² | £32.33/m² |
| Scottish Borders | £12.39/m² | £24.77/m² |
| South Ayrshire | £14.81/m² | £29.63/m² |
| South Lanarkshire | £14.23/m² | £28.46/m² |
| Stirling | £14.29/m² | £28.59/m² |
| West Dunbartonshire | £15.32/m² | £30.64/m² |
| West Lothian | £16.53/m² | £33.06/m² |
* The brownfield figures reflect a 50% reduction from the relevant headline rate. The final value of the relief and the definition of brownfield land remain subject to technical consultation and subsequent arrangements.
When does the levy apply?
The levy will apply to new residential units, including certain conversions, where the relevant building control event occurs on or after 1 April 2028. Its scope includes build-to-rent accommodation and purpose-built student accommodation.
Liability is triggered when there is a relevant "building control event" being the earliest of the grant of permission for temporary occupation or acceptance of a completion certificate for a new residential unit. The tax liability rests with the owner at the trigger date, making the ownership position at that point a key commercial consideration.
What exemptions and reliefs are available?
The Act includes a number of exclusions and exemptions. These include certain forms of temporary or institutional accommodation, such as hotels, hospitals, prisons and school dormitories which are excluded from the regime; conversions of property already suitable for use as a dwelling where the works do not increase the number of dwellings available; certain affordable housing funded by the Scottish Ministers or local authorities; and new residential units constructed on islands which are exempt.
The scope of those exclusions and exemptions may change. Section 6 gives the Scottish Ministers power to modify the categories of buildings which may fall within, or outside, the levy regime, including by amending the meaning of an "exempt new residential unit". The availability of an exemption or exclusion may be particularly important for mixed-tenure schemes, phased developments and projects with more complex ownership or funding structures.
The Act also provides for an annual levy-free allowance. In each financial year, a taxpayer may deduct 29 building control events before calculating the building control events on which levy is payable. This allowance is likely to be particularly important for smaller developers.
Further reliefs may be introduced in secondary legislation. Section 11 requires Scottish Ministers to make provision for relief on new residential units on brownfield land, with that relief to be at least 50% of the levy otherwise payable (as illustrated in the indicative rates now published). It also allows Ministers to introduce further reliefs, which may include relief for units sold to first-time buyers.
Given the particular cash flow risk for build-to-rent and purpose-built student accommodation developments where a large number of units may complete and trigger a levy charge at the same time, the Scottish Government has also indicated that it will consider temporary payment flexibilities for those asset classes. The scope and duration of any such payment flexibility remains to be confirmed. These outstanding matters are the subject of a current Scottish Government consultation which is open until 9 October 2026.
How will the levy be administered?
Revenue Scotland will administer the levy. Taxpayers will be required to self-assess, register and submit returns, with payments made by reference to accounting periods to be set by the Scottish Ministers via secondary legislation.
The Act also provides for penalties in the usual compliance areas, including failure to register, failure to submit a return, failure to pay the levy and inaccuracies in documents.
How will the levy be calculated?
In broad terms, liability will be calculated by identifying the relevant building control events, applying any available reliefs and the annual levy-free allowance, and then applying the appropriate levy rate to the floorspace of the new residential units.
Practical implications for real estate clients
The levy has the potential to affect development viability, funding assumptions and pricing. It will be particularly relevant for larger residential schemes, build-to-rent developments, and purpose-built student accommodation.
Developers should begin to assess the potential impact now. Key considerations include potential exemptions and reliefs, who will own the building at the relevant trigger date, allocation of the levy risk and modelling of exposure by floorspace, geography and phasing. In time, preparation should be made for registration and reporting obligations with Revenue Scotland. The Act is now part of the Scottish development landscape. The full commercial impact will only become clear once secondary legislation is published but, in the meantime, developers and investors should factor the new regime into site acquisition, appraisal, funding and delivery strategies.
Originally published 3 August 2026
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