THE BUILDING SAFETY LEVY: Have you factored it into your project? Key points and further sources of guidance.
From 1 October 2026, the new Building Safety Levy will be charged on construction projects (subject to exclusions) containing residential accommodation, which could easily affect projects at the planning and design stages right now.
WHY?
The Building Safety Levy is part of the Government’s plan to accelerate the pace of remediation to buildings affected by safety issues brought to light after the Grenfell Tower Inquiry. The Government says that it is essential to protect leaseholders from remediation costs and has set a target of raising £3.4 billion over approximately 10 years.
WHAT BUILDING PROJECTS ARE AFFECTED?
The works must constitute, or form part of, a major residential development and the works must result in the creation of new residential floorspace. For the purposes of the Building Safety Levy, a major residential development is a development of 10 new dwellings or more, or 30 new bedspaces or more if the development is purpose-built student accommodation. Social Housing and Supported Housing are excluded.
WHEN?
As part of the Remediation Acceleration Plan published in December 2024, the Government originally announced its intention to launch the levy in Autumn 2025. It has now determined that the levy will come into effect on 1 October 2026 and will affect relevant Building Control applications made from that date. Previously submitted applications that have not been deemed to have ‘commenced’ within three years may lapse.
WHO PAYS?
Liability for payment lies with the "named client" in the Building Control application.
WHO COLLECTS?
Local Authorities have collecting authority responsibility for the buildings located within their area, even where works are carried out under initial notices submitted by RBCAs or under applications to the Building Safety Regulator.
The Government has produced process maps which provide information on how levy payments and information should work across the various levy collection routes:
https://www.gov.uk/guidance/building-safety-levy-guidance/annex-a-process-maps
HOW MUCH WILL IT COST?
The Government has set and listed levy rates for each Local Authority area. This is the rate that is charged per square metre of chargeable floorspace in a chargeable development. Chargeable floorspace is the new residential floorspace that will be created as a result of the works in the application.
Chargeable developments which are constructed on previously developed land (PDL), sometimes known as brownfield land, will be charged using a 50% discounted levy rate to reflect the often-higher cost of developing this type of land.
All chargeable development where planning permission is granted through permitted development rights will be charged using the PDL discounted rate. The Government has published the levy rates per m² for every Local Authority, which reflect local property values.
For example, the non-discounted (PDL) rate per m² for Gateshead is £15.93, for Hammersmith & Fulham it is £91.87
Guidance is subject to any changes the Government might introduce. Always check the latest updates: https://www.gov.uk/guidance/building-safety-levy-guidance