Preparing for the new Building Safety Levy

The Building Safety Levy is a new mandatory charge on residential development in England. Set out in the Building Safety Levy (England) Regulations 2025, it comes into force on 1 October 2026.

Below is a summary of the regulations, alongside practical steps to help you navigate another new regulatory regime affecting all types of developers.

What is the purpose of the Building Safety Levy?

The purpose of the levy is to fund the remediation of historic building safety defects so that the cost of making buildings safe doesn’t fall on residents and leaseholders. The government has stated that its aim is to raise £3.4bn through the levy.

What development does the Building Safety Levy apply to?

A development is chargeable to the Building Safety Levy where it includes at least 10 new dwellings or 30 new purpose-built student accommodation bedspaces.

The levy process applies to building control applications and initial notices submitted on or after 1 October 2026 for works that result in new residential floorspace and/or new bedspaces in purpose-built student accommodation, subject to a list of exempt forms of development. These include affordable housing and certain non-residential uses, such as hotels and care homes. Development by non-profit registered providers of social housing is also exempt.

The levy therefore applies to a wide variety of developments, including new dwellings, retirement housing, office-to-residential conversions and vertical extensions, to name a few. Despite exemptions for certain forms of development, the burden of correcting historic building safety defects is being passed to the housebuilding industry as a whole rather than to specific offenders.

How much will the Building Safety Levy cost?

The Building Safety Levy is charged on a per-square-metre basis, calculated by reference to the gross internal area of new residential floorspace. The price per square metre for every local authority area in England is set out in schedule 3 of the regulations.

A 50% discount on the applicable rate is available where at least 75% of the land on which the development is carried out is ‘previously developed land’, as defined in the regulations. It will therefore be critical, both when carrying out site appraisals and when seeking to minimise levy liability, to properly consider the status of the proposed development land in good time.

The levy must be paid before the earlier of first occupation or the date on which a completion certificate is issued. Unlike the Community Infrastructure Levy, there is no phasing of payments, so it will be important for all developers to consider the impact on cash flow and viability at the site acquisition and planning stages of development.

Practical considerations

• Pre-levy window: the Building Safety Levy doesn’t come into force until 1 October 2026, so if you haven’t already submitted building control applications for a scheme, there is still time to do so and avoid any levy liability, subject to works commencing before the building control application lapses
• Financial planning: the Building Safety Levy will need to be factored into all new bids and viability appraisals using the published local authority rates
• Design changes: mid-construction design changes made after 1 October 2026 could trigger a recalculation of the levy if a new building control application is required and should therefore be carefully considered.