The Building Safety Levy coming into effect from 1 October 2026

What is the levy?

The Building Safety Levy is a new policy, which was introduced by s.58 of the Building Safety Act 2022. It is not yet in force, but The Building Safety Levy (England) Regulations 2025 has been published in draft, outlining how and when this new system will come into effect.

The levy is payable by developers and will be charged on specified applications for building control approval in England made on or after 1 October 2026. It aims to enable the Secretary of State to provide financial assistance for the purpose of remediating building safety defects in residential buildings and to unburden leaseholders and taxpayers from these costs. It is expected to raise £3.4 billion over the next 10 years. This is in addition to the £5.1 billion that the government has already committed via the Building Safety Fund.

The draft Regulations may change as they are discussed in Parliament but they provide a good indicator of what is to come and an opportunity for developers to prepare for their implementation.

The Regulations will only apply in England but the Scottish government has recently introduced the Building Safety Levy (Scotland) Bill into the Scottish Parliament with similar aims and application to the English levy.

When does it apply?

Subject to a few exemptions, the levy applies to the provision of residential buildings or purpose built student accommodation in England.

The levy will be payable by the person identified as the client in the application for building control approval or in the initial notice or other specified notices/certificate, as set out in Schedule 4 of the Regulations. In most cases the client will be the developer of the project.

What exemptions are there?

The Regulations will not apply to:

• accommodation which has wider social or community benefit, such as social and supported housing, hospitals, hotels, care homes, school accommodation, temporary accommodation for homeless people and domestic abuse refuges
• sites of fewer than ten dwellings (or fewer than thirty bedspaces for purpose built student accommodation) and
• non-profit registered providers of social housing (and their wholly owned subsidiaries) and all buildings constructed by them

How is the levy calculated?

The levy rate is calculated per every square metre of floorspace in the new residential development according to an agreed rate for each local authority in England. These rates are available in Schedule 3 of the draft Regulations. Work on previously developed land (which has a broad definition in the Regulations and is likely to cover brownfield sites) is half the standard rate, to reflect the often higher cost of building on these sites.

To aid this calculation, the client must provide basic levy information as part of a building control application or notice (including the number of new dwellings or purpose built student accommodation bedspaces and information identifying the planning permission under which works are to be carried out (where applicable)). If this information is not included in the application or notice, the local authority (or the Building Safety Regulator (‘BSR’) where they are the building control authority) may reject the application or notice.

Upon commencement of the works, the client must provide additional information such as:

• the area of the new residential floorspace being created (including communal space)
• the previously developed land qualification (if appropriate) and
• the application of any exemptions

The client must submit updated information to recalculate the levy charge if:

• there are changes during construction which trigger a new application for building control approval
• there is a change control application
• there is an amendment notice
• the application of exemption changes and/or
• the client becomes or ceases to be a non-profit registered provider of social housing

This information may be subject to a spot check by the local authority.

When is the levy paid?

The levy applies to applications for building control approvals made on or after 1 October 2026.

The client must pay the levy to the local authority after the works have commenced and before the earlier of either building occupation or submission of the notice or application required at completion stage under existing legislation.

When building control applications for higher-risk building work are made to the BSR, the information will be sent by the BSR to the relevant local authority for calculation and levying of the charge. When applying for the completion (Gateway 3) certificate to the BSR, the client will have to notify the local authority of that application, and they will then have to confirm within 10 days that the levy has been paid to the local authority.

Local authorities are collection agents for the levy, who will pass on the revenue and management information to the Ministry of Housing, Communities and Local Government on a quarterly basis, subject to a deduction to cover administration costs.

The local authority may charge any additional levy owed or refund any overpayment if the calculation of the levy changes during construction.

What happens if the levy is not paid?

If the client fails to pay the levy, the building control completion certificate is withheld by the local authority (or the BSR) or the final certificate provided to the local authority by a registered building control approver is rejected.

Conclusions

The implementation of the levy has been delayed so that developers had an opportunity to input into a consultation on how the levy will work and to provide them with sufficient time to adapt.

The levy rates have been calculated using data on average house prices in each local authority area, in order to mitigate the impact of the levy on housebuilding. However, the fact that the levy will apply to applications for building control approval made on or after 1 October 2026 is likely to cause viability and affordability issues for schemes which have been planned and consented, with section 106 agreements finalised before any details about the Levy were announced. This may well lead to further delay in bringing schemes forward whilst developers attempt to re-open negotiations.

The exemptions are intended to mitigate the impact of the levy on new housebuilding; however, these have limited scope and are unlikely to affect mainstream future development.

Further information on building safety can be found here.