*New* Building Safety Levy

The draft Building Safety Levy (England) Regulations 2025 usher in a new era of accountability, assigning responsibility for housing safety costs squarely onto developers rather than leaseholders or taxpayers.

What Is the Building Safety Levy?

From 1 October 2026, the Building Safety Levy will become mandatory for most new residential builds and certain student accommodations applying for building control in England, barring a set of exemptions. The aim is to ensure developers fund remediation where original builders have neglected fire safety or other defects, making homes safer and shifting the burden off residents.

Why Introduce the Levy?

This levy is designed as a direct response to systemic building safety failures, especially following events like Grenfell. It compels developers to pay for remedial works, raising around £3.4 billion over a decade to fix unsafe residential buildings across England. The tax applies to most new residential buildings and conversions requiring building control, impacting not just private homes, but also student residences, retirement communities, and built-to-rent schemes.

Who Collects the Levy, and How Much?

Local authorities, tasked with oversight and tax collection, will administer the levy. The rates are set by local authority depending on average house prices in each region—higher prices mean higher levy rates, calculated per square metre of Gross Internal Area. Developments on brownfield (previously developed) land receive a 50% discount, provided at least 75% of the site is classed as such.

Charging Conditions and Exemptions

Three key conditions must be met for a project to be liable:

• The works constitute or form part of a major residential development—10 or more dwellings or 30+ student bedspaces.

• The works create new residential floorspace (excluding social housing and certain communal accommodations).

• The client is not an exempt person (e.g. registered providers of social housing or wholly owned subsidiaries).

Notable exemptions include extensions that don’t create new dwellings, most social/affordable housing, hospitals, schools, care homes, homeless accommodation, and various other communal or specialized residences.

Government Guidance for Developers

Developers must now plan for the levy in all early appraisals. Applications for building control are required to include detailed levy information—such as the number of units, planning status, and client declarations. Missing these details can result in rejection of applications.

• Upon acceptance, a commencement notice triggers levy calculation.

• Payment is required in full before a completion certificate is issued.

• Local authorities will issue a levy payment certificate confirming transactions for record keeping.

• Failure to pay will lead to certificates being withheld, delaying occupation, and part-payments are not permitted.

If project details change (such as scope or planning status), updated levy info must be submitted, and developers can appeal or seek review if charges are disputed.

What Does This Mean for Architects?

While architects aren’t direct payers, clients will expect them to be up-to-date. The levy impacts feasibility, design, and commercial outcomes—consultation with clients should cover compliance, accurate pre-appraisals of costs, and transparency early in design to ensure smooth approvals. Architects can provide value by alerting clients to the levy if their plans involve 10 or more dwellings (or 30 bedspaces).

Key Takeaways

• The Levy makes the industry—not residents—pay for past and future safety failings.

• It comes into force for applications from 1 October 2026, charged per square metre, with higher rates in pricier areas and discounts for brownfield sites.

• Only developments meeting major-residential scale, new space creation, and non-exempt status must pay.

• Accurate documentation and planning are critical for success under the new regime—delays, errors, or non-payment could halt projects.

The Building Safety Levy is set to significantly alter the development landscape, emphasizing safety, diligence, and accountability at every stage.

Tune in to episode 178 of our podcast to learn all about it!