Building Safety Levy Start Date Postponed and Rates Published

Gemma Whittaker, Partner at Gowling WLG

GEMMA Whittaker and Emma Knight from international law firm Gowling WLG talk us through the Government’s response to the Building Safety Levy consultation.

The Government has confirmed that the Building Safety Levy – which will be charged on all new dwellings and purpose-built student accommodation in England which require a building control application – will not now come into effect until Autumn 2026.

Emma Knight, Principal Associate at Gowling WLG

The Remediation Acceleration Plan, published in December 2024 had set an implementation date of ‘Autumn 2025’ for the Levy.

However, the Government response to the most recent consultation on the Levy which closed in February 2024, now confirms that this will be pushed back to Autumn 2026. This is intended to give “local government, the Building Safety Regulator, and Registered Building Control Approvers around 18 months to prepare for the levy; and housing developers who will pay the levy around 18 months to factor levy cost into their financial planning.”

The Response also notably confirms details of the Levy rates, and exclusions from the scope of the Levy.

We explore some of the key takeaways below.

Scope and Exclusions from the Building Safety Levy

The scope has been expanded since the Levy – which is defined in section 58 of the Building Safety Act 2022 (BSA) – was initially outlined in 2021, when it was envisaged that it would only apply to higher-risk buildings (HRBs).

A prior public consultation which ran from November 2022 to February 2023 confirmed that its scope would be extended to apply to all new residential buildings requiring building control approval (subject to certain exclusions, discussed below).

The latest Response now confirms that:

• the Levy will be charged on all new dwellings and purpose-built student accommodation (PBSA) in England which require building control approval, and reiterates that it will apply to retirement housing and build-to-rent (BtR) developments (as well as PBSA);
• it will not apply to developments of fewer than 10 units, and it appears to confirm the previously announced threshold of 30 bedspaces in PBSA developments (although we will need to wait for the regulations to clarify this latter point), and;
• hotels are intended to be excluded from the scope of the Levy (since the Levy is designed to be charged on “primarily residential developments”).

The Response also confirms further exclusions from the Levy for affordable housing, non-social homes built by not-for profit Registered Providers, NHS hospitals, supported housing, children’s homes, domestic abuse shelters, criminal justice and military accommodation, and care / nursing homes.

Levy Rates

The Response contains, in Annex A, the applicable levy rates for each local authority area in England. These apply per square metre of chargeable floorspace (measured using Gross Internal Area (GIA), as set out in the RICS Code of Measuring Practice 6th Edition).

Communal areas will be subject to the levy charge, as despite several respondents – including the retirement sector – having lobbied for their exclusion, Government takes the view that they are for the use or benefit of occupants and so contribute to the value of the building.

The exact amount payable under the Levy will vary, depending on whether development is on previously developed land or not, and according to which local authority area the property is situated in.

The consultation response gives an example based on a development of 20 houses in Dover.

Below, we have provided a couple more examples, based on minimum GIAs under the nationally described space standard (in each case not including calculations for associated communal areas):

Example A

A two-double bedroom flat on previously developed land measuring 70 square metres.

• County Durham £444.50
• Kensington and Chelsea £3,511.90

Example B

A four-double bedroom house over two floors on land which has not previously been developed, measuring 124 square metres.

• Surrey Heath £5,800.72
• East Devon £4,223.44
• Wolverhampton £3,026.84
• Hartlepool £1,589.68

When will the Building Safety Levy be Calculated and Collected?

Full details of the collection process will be set out in the regulations and will be subject to approval by Parliament, but the Response indicates the intention for the provision of information to be split between application / initial notice stage and commencement stage.

It envisages that:

• The client (developer) will submit information which will allow the collecting authority (local authority (LA)) to calculate levy liability.
• At application / initial notice stage, information will be required as to the number of dwellings which will be created as a result of the development, or bedspaces in the case of PBSA.
• At first commencement notice stage, information will be required as to whether any exemptions apply, whether the development is on previously developed land, as well as the GIA of the chargeable floorspace of the development, including communal areas.

Failure to provide levy information will be added as a ground for the rejection of an application for building control approval or initial notice, to reduce the burden on LAs of chasing missing information.

The Response indicates that in most cases, the collecting authority will calculate the Levy amount within five weeks of the submission of the levy information accompanying the first commencement notice, and will issue the client and where applicable, the Registered Building Control Approver (RBCA) with a “notice of levy liability” or confirmation that the Levy is not applicable.

Regulations are also expected to state that a completion certificate must not be issued by the relevant building control authority (the LA or BSR for HRBss) (or for clients using a RBCA , the LA must reject any final certificate given) if the Levy has not been paid.

Key Takeaways

Although it has taken over a year to be published since the consultation closed in February 2024 (and noting the change in Government in the intervening period), the Response does provide some welcome clarity as to the scope of the Levy, the rates, the process for its collection and the types of developments which will be excluded.

Postponement of the implementation date will be welcomed by housebuilders and developers, who recently called on Government to reconsider plans for the Levy, in a joint letter sent by the Home Builders Federation (HBF). Government confirmed in a written statement on 24 March 2025 that the postponement was in order to “give the housing sector more time to adapt” as well as giving “housing developers who will pay the levy more time to factor levy costs into their plans”.

Developers will, however, need to await publication of the regulations for detail of the trigger point for when developments currently in the pipeline will attract the Levy. This is currently expected to be based on the timing of submission of the building control application or initial notice, although this is not confirmed in the Response.

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