Building safety levy

[edit] Introduction

The Building Safety Levy is a charge on new residential development in England. It came into operation on 1 October 2026. The money raised helps pay to fix historical building safety defects, such as unsafe cladding, so that leaseholders and taxpayers do not have to.

The levy applies to building control applications and initial notices submitted on or after 1 October 2026. It is charged per square metre of new residential floorspace, at a rate set for each local authority area, and must be paid before a completion certificate can be issued. Local authorities collect it.

The levy applies in England only. Wales, Scotland and Northern Ireland are not covered.

The levy sits alongside other measures that make the housebuilding industry pay towards remediation. These include the Residential Property Developer Tax (RPDT), a 4% tax on large developers' profits introduced in April 2022, and the developer remediation contract, under which major housebuilders agreed to fix buildings they developed.

19 December 2019: Building Safety Bill announced in the Queen's Speech
28 April 2022: Building Safety Act 2022 receives Royal Assent
22 November 2022 – 7 February 2023: First consultation on scope, exemptions and collection
23 January 2024: Response to the first consultation and launch of a technical consultation (closed 20 February 2024)
December 2024: Remediation Acceleration Plan announces an autumn 2025 start
March 2025: Home Builders Federation (HBF) and housebuilders call for the levy to be suspended
24 March 2025: Technical consultation response published; start moved to autumn 2026
10 July 2025: Building Safety Levy: guidance published alongside the regulations
2025: Building Safety Levy (England) Regulations 2025 (SI 2025/1236) made
2 July 2026: Guidance updated for the Building Safety Levy (Amendment) (England) Regulations 2026
1 October 2026: Levy comes into operation

The start date was delayed to give local authorities, building control bodies and developers about 18 months to prepare. The government's revenue target is £3.4 billion. This is the sum still needed for remediation once public funding, industry pledges and contractual obligations are taken into account.

The levy applies to new dwellings, purpose-built student accommodation (PBSA) and changes of use to residential. It applies regardless of building height, so it is not limited to higher-risk buildings. The person who pays is the client named on the building control application or initial notice.

Small developments are exempt. A development is only charged if it is a major residential development: 10 or more new dwellings, or 30 or more PBSA bedspaces. Other exemptions include:

social and affordable housing, including social rent, affordable rent, shared ownership and First Homes
developments by non-profit registered providers and their wholly owned subsidiaries
supported housing
care homes, hospitals, children's homes and domestic abuse refuges
armed forces and Ministry of Defence accommodation
prisons, hotels, almshouses and temporary accommodation for homeless people

The levy is charged per square metre of gross internal area (GIA) of chargeable floorspace, including a share of communal areas. Rates are set by government for each local authority area and listed in the regulations. Higher rates apply where house prices are higher. Standard rates range from £6.35/m² in County Durham to £50.17/m² in Kensington and Chelsea.

Development on previously developed (brownfield) land is charged at half the standard rate. The 2026 amendment regulations confirmed that hard standing and car parks count as previously developed land. PBSA is charged at the same rate as other dwellings.

Building control application or initial notice: the developer gives initial levy information, such as the number of dwellings or bedspaces.
First commencement notice: the developer gives full levy information, including floor areas and exempt dwellings, for all the works in the application.
Levy determination: the local authority, as collecting authority, calculates the charge. It has 5 weeks to do this, or 8 weeks if the information is spot-checked.
Payment: the developer can pay at any time before completion or occupation, whichever is earlier.
Completion: the completion certificate or final certificate is withheld until the levy is paid in full.

The charge is recalculated if the works change, and any overpayment is refunded. Building control bodies have to check with the collecting authority before issuing a completion certificate. This applies whether building control is provided by the local authority, a registered building control approver (RBCA) or the Building Safety Regulator.

The main concern is the effect on housing supply. In March 2025, the Home Builders Federation and a large number of housebuilders wrote to the Chancellor asking for the levy to be suspended. They made these points:

Housing targets: the levy could make it harder to meet the government's target of 1.5 million new homes in this Parliament.
No impact assessment: no formal assessment had been made of the levy's effect on housing supply, including affordable housing.
Smaller builders: small and medium-sized builders already face rising costs and regulation.
Fairness: housebuilders say they have already paid about £6.4 billion through the RPDT and self-remediation pledges. Construction product manufacturers, some criticised in the Grenfell Tower Inquiry Phase 2 report, have not yet contributed.
Need: more than £2.5 billion of the £5.1 billion Building Safety Fund was still unallocated at the time.

The government went ahead with the levy but delayed its start to October 2026. Supporters argue that developers, rather than leaseholders or taxpayers, should meet the remaining remediation costs. The exemptions for small sites, social housing and brownfield land are intended to soften the impact on supply.