From 1 October 2026, developers of certain residential schemes inEngland may need to factor in a new cost: the Building Safety Levy. Introducedunder the Building Safety Act 2022 and later regulations, the levy is designedto help fund the remediation of building safety defects and ensure thedevelopment industry contributes towards making homes safer.

One of the most important things to understand is that the levy islinked to the building control process, not planning permission. This meansthat even if a development already has planning consent, it could still becaught by the levy if the relevant building control application is submitted onor after 1 October 2026.

Which Developments Are Affected?

The levy will generally apply to residential developments thatcreate new residential floorspace and form part of a major scheme delivering:

• 10 or more new homes; or
• 30 or more purpose-built student accommodation bedspaces.

Importantly, the levy is not limited to high-rise buildings. Itcan apply to developments of any height, including new builds, conversions,changes of use and certain extensions.

Who Pays the Levy?

In most cases, the levy will be payable by the developer, beingthe person identified as the "client" in the building controlapplication. The levy must be paid before the earlier of occupation of thebuilding or the issue of the completion certificate. A local authority cannotissue a building control completion certificate until the levy has been paid infull.

How Is It Calculated?

The levy is charged based on the amount of new residentialfloorspace created, using a rate per square metre. Rates will vary across localauthority areas, with higher-value locations generally attracting highercharges. Certain brownfield developments may qualify for reduced rates.

Are Any Developments Exempt?

A number of developments that provide wider social or communitybenefit may qualify for exemptions, including:

• Affordable and social housing;
• Supported housing;
• Hospitals;
• Schools and educational accommodation;
• Care homes; and
• Temporary accommodation for homeless persons.

However, developers should be aware that mixed-use or mixed-tenureschemes may still attract the levy on the chargeable parts of the development.

What Should Developers Be Doing Now?

With the levy now in force, developers should review existing and upcomingschemes to identify whether they may fall within the scope. Understanding anyavailable exemptions, budgeting for potential levy costs and checking LevyLiability Notices carefully will help avoid unexpected costs and delays laterin the development process.

Whilst the Building Safety Levy introduces another considerationfor residential developers, early planning and a clear understanding of theregime can help minimise its impact and keep projects on track.

This blog is intended asgeneral information only. If you are looking for advice, please call a memberof the team on 01926 954694.

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