The building safety levy is being introduced in England to raise an estimated £3bn over 10 years to help pay for the remediation of buildings with non-compliant cladding and fire safety systems
As part of its Remediation Acceleration Plan, published in December 2024, the government announced its intention to launch the levy in autumn 2025. It has now decided that the levy will come into effect in autumn 2026 instead, with the levy regulations to be laid in parliament later this year.
It said that this would give local authorities, the Building Safety Regulator and registered building control approvers more time to prepare for the levy, and developers more time to factor levy costs into their financial planning.
It has also published the full cost of levy rates for each English local authority, with rates for building on non-previously developed land approximately twice the rates for previously developed land.
The building safety levy liability for a building control application will vary from £6.35 per square metre for previously developed land in Country Durham to £98.01 per square metre for non-previously developed land in Westminster.
British Property Federation policy director Ian Fletcher welcomed the postponement of the levy’s introduction. He said: “Given the delivery challenges currently being faced by the housing sector, especially in relation to viability and start-on-sites, it is welcome news that the government is delaying the introduction of the building safety levy until the autumn of next year. Developers need to be able to cost the levy into projects that will be going through planning now and can only do so now the government has finally published the levy rates. Those bodies responsible for administering and collecting the levy also need to be ready and given the issues with both the Building Safety Regulator and with local government re-organisation underway in many areas, it is sensible to delay. This levy is going to hugely challenge the viability of various forms of house building in places that need it most and the proposed brownfield rates in low house price areas will have little impact. It would have been far better and simpler to have based the levy rates on CIL rates, plus created an exemption for developers of rental accommodation who have no call on the building safety funds, for which it is meant to be recovering the costs of.”
Neil Jefferson, chief executive at the Home Builders Federation, said: “The delay to the implementation of this new tax on home building is welcome recognition from government that these additional costs will inevitably constrain housing supply, but the news that ministers will still press ahead with this grossly unfair levy rather than obtaining contributions from powerful product manufacturers is a disappointment.
“As proposed it will add thousands of pounds to the cost of new homes, threatening the viability of sites across swathes of the country at a time when industry is striving to reverse the decline in home building numbers that we have seen in recent years.
“UK house builders are already paying over £6bn to remediate all their own buildings as well as those build by other parties through the pre-existing building safety tax. Surely the companies that tested and supplied the dangerous materials, still yet to contribute a penny, should be targeted before Government imposes yet another tax on British businesses, many of whom have never built anything taller than a typical family house."
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