England Implements Building Safety Levy for New Developments

News Summary

The UK government is set to introduce a Building Safety Levy for new residential developments starting in Autumn 2026. This initiative aims to improve safety standards following past tragedies, including the Grenfell Tower fire. The levy will affect major residential developments comprising at least 10 dwellings or 30 bedspaces for student accommodation. While the initiative aims to raise funds for building safety remediation, it may pose challenges for small and medium-sized developers who could struggle with the additional financial burden.

England Moves Closer to Implementing Building Safety Levy for New Residential Developments Starting October 2026

The government of England is set to roll out a new Building Safety Levy that will begin collecting funds from major residential developments starting in Autumn 2026. This initiative aims to generate resources dedicated to the remediation of unsafe buildings and is part of the broader legislative response to the Grenfell Tower tragedy. As the draft Building Safety Levy (England) Regulations 2025 have been laid before Parliament, developers should prepare for important changes that could affect project costs and viability.

Levy Details and Scope

This levy will apply to all new “major residential developments” across England, which are defined as projects comprising at least ten new dwellings or 30 new bedspaces specifically for purpose-built student accommodation. However, certain categories will be exempt from the levy, including affordable housing, care homes, hotels, hospitals, and various supported housing options.

How the Levy Will Be Calculated

The amount developers will need to pay will be calculated based on the Gross Internal Area (GIA) of the construction. Notably, the levy rate will vary by local authority, responding to the average house prices in different regions. Developers building on previously developed land, commonly referred to as brownfield sites, can benefit from a 50% reduction if at least 75% of the land qualifies as brownfield.

Application and Compliance Requirements

It is mandatory for developers to submit detailed information concerning the levy during the building control application or initial notice stages. Local authorities will play a crucial role in determining each project’s levy liability and collecting the respective payments. Precise provision of levy information is vital; inaccuracies could lead to the rejection of building control applications.

In cases where construction works undergo alterations, developers may need to file a “variation application”, which could affect the levy charge. If a situation arises where the levy charge was paid but later determined to be reduced, refunds will be processed within a two-week timeframe. Furthermore, until the levy is settled in full, building control completion certificates will not be issued.

Disputes Over Levy Liability

Developers will also have the right to dispute their levy liability within 28 days of receiving a liability notice. The guidelines surrounding exemptions from the levy can be found in greater detail within Schedules 1 and 2 of the draft Regulations.

Impact on Housing Supply

Financial Goals and Future Provisions

The government has set an ambitious target to raise £3.4 billion over the next ten years through the implementation of this levy. There will also be a review of the levy rates every three years, ensuring they remain aligned with economic conditions. Additionally, local authorities are required to report their revenue from the levy on a regular basis to the central government.

What’s Next for Developers?

Following the implementation of this levy in England, plans are also underway for a similar building safety levy in Scotland, anticipated to take effect on 1 April 2027. Developers are therefore encouraged to act swiftly, submitting their building control applications before the levy is instated to mitigate any additional charges that may impact their development costs.

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Additional Resources

• Womble Bond Dickinson: Step Closer to Building Safety Levy
• Wikipedia: Building Safety in the United Kingdom
• Travers Smith: Building Safety Levy
• Google Search: Building Safety Levy
• Shoosmiths: Building Safety Levy Rates Confirmed
• Encyclopedia Britannica: Building Safety
• Pinsent Masons: New Building Safety Levy
• Google News: Residential Building Developments
• Charles Russell Speechlys: The Challenges of the Building Safety Levy
• Osborne Clarke: Building Safety Levy Delayed Rates Confirmed