Episode 178:

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I am your host Maria Skoutari and this week we will be talking about the newly established Building Safety Levy. Todays’ episode meets PC3 of the Part 3 Criteria.

In early July of this year, 2025, the draft Building Safety Levy (England) Regulations 2025 were released marking a new era of accountability on how responsibility for safe housing is shared across the industry.

The Levy will come into force on 1st October 2026. So any applications relating to the provision of one or more dwellings and/or one or more purpose built student accommodation on or after that date will be liable to pay the levy, unless if it is exempt. 

Why is this Levy being introduced:

The aim of the Building Safety Levy is to ensure that developers contribute to the cost of remedial measures for residential structures on certain building control applications or notices before the completion or occupation of a building, whichever occurs first. 

It is essentially a tax that will be imposed on most new residential buildings and some conversions in England that require building control approval. This includes purpose built student accommodation, built-to-rent schemes, retirement communities and change of use to residential purposes.

What will the Levy entail:

The levy will be collected by local authorities, as local guardians of the building control process who have tax collection expertise. The income raised from the levy will contribute to fixing building safety defects across England only where the original developer has not taken responsibility for addressing fire safety defects, ensuring residents are safe. 

The government has set the levy rates for each local authority area in the legislation. The rates have been weighted using average house prices in local authority areas, so that areas with the highest average house prices have the highest levy rates, and those with the lowest average house prices have the lowest levy rates. The amount payable will vary depending on the building’s size, use and location. The levy rates are set per square metre and the charge is calculated on the floorspace of the development based on its Gross Internal Area.

It is anticipated there will be a discount of 50% for developments built on Previously Developed Land, also known as ‘brownfield’ land, where at least 75% of the land within the redline boundary qualifies as Previously Developed Land.

So what are the exact charging conditions under the Levy:

There are three charging conditions by which the levy applies:

1. The first being the works constituting or forming part of a major residential development. Meaning a development of 10 new dwellings or more, or 30 new bedspaces or more if the development is a  purpose built student accommodation.
2. The second is relating to works resulting in the creation of new residential floorspace. This include new dwelling, other than social housing, new purpose built student accommodation and new communal areas which are intended to be used by chargeable dwellings or purpose built student accommodation. 
3. And the this is relating to the client not being an ‘exempt person’. If the client is an exempt person, such as a non-profit registered provider of social housing or a wholly owned subsidiary company, all of their works are exempt from the levy charge, whether or not the intended use of the buildings is otherwise classed as exempt. Exemptions include alterations and extensions to a property as long as they don’t create new dwellings or new purpose built student accommodation bedspaces, social housing, hospitals, school accommodation (meaning residential accommodation provided by a school for the use of its students), accommodation for victims of domestic abuse, children’s homes and residential family centres, hotels and hostels, monasteries, nunneries, seminaries, care homes and hospices, secure residential accommodation such as prisons, almshouses, temporary accommodation for homeless people, accommodation for the armed forces and Ministry of Defence or Crown properties. 

In order for the levy to be chargeable, the works in the application or notice must meet all 3 charging conditions.

What advice does the government provide for developers:

Well, firstly developers will need to begin to factor the levy charges into their appraisals. This will inevitably put more pressure on the viability of some marginal projects.

Now when putting their building control applications together for approval, which relates to the provision of one or more new dwellings or one or more new bedspaces of purpose built student accommodation, it must be considered whether the works meet the levy charging conditions.

When submitting the application with full plans to the local authority for works which relate to the provision of one or more new dwellings or one or more bedspaces in purpose built student accommodation, initial levy information will need to be provided. The information should include:

• The number of dwellings that will be created (or bedspaces if the works are purpose built student accommodation) by the works in the application or notice.
• if permitted development rights are being used, confirmation of this should be provided and: confirmation that no prior approval of the local planning authority is required, and information illustrating this, or confirmation that prior approval of the local planning authority is required and has been obtained and information identifying this, or confirmation that prior approval of the local planning authority is required and an application to the LPA has been made but not yet determined, or confirmation that prior approval of the LPA may be required and an application has not yet been made.
• if the works are being developed under a planning permission, confirmation of this will need to be provided and: confirmation the planning permission has been granted, and the planning permission reference number, or confirmation that planning permission has been applied for, but it has not yet been granted, in which case the planning application should also be identified, or confirmation that planning permission has not yet been applied for.
• if the dwellings and/ or purpose-built student accommodation that are being built are part of a nationally significant infrastructure project, a statement that the development is being constructed under a Development Consent Order
• a statement as to whether or not the works in the application or notice: are anticipated to be major residential development – that is, a development of 10 dwellings or more, or 30 or more bedspaces, if the works are purpose-built student accommodation, or form part of a wider development that is anticipated to be major residential development for which there is or is anticipated to be planning permission.
• If an initial notice is given on behalf of a client, the signed statement from the client confirming that the levy information provided is accurate must be included.

Developers should be wary of the information to be provided as the local authority can reject an application for building control approval with full plans if this information is not included. 

Once the application has been submitted and accepted by the local authority, the developer must then submit the first commencement notice to the local authority to allow the collecting authority to calculate the levy charge. 

The levy can then be paid at any point between receiving the levy liability notice and notifying the local authority of completion, which must be done before works have been completed which is when the developer/client will need to provide a levy liability statement when giving notice of completion. The whole levy charge for the application must be paid before a completion certificate can be issued for any of the works contained within it. Once the whole levy charge for the application has been paid, a levy payment certificate from the collecting authority will be issued within 2 weeks. This is official confirmation that payment has been received and should be retained for client records. 

Failure to pay the levy will result in local authorities withholding the completion certificate. Also partial payments will not be permitted, so for a staged developments the levy will need to be paid before a completion certificate can be issued for the first phase.

In the case where changes are to be made to the works which require the submission of a further application for building control approval with full plans, updated levy information must be provided as part of the application.

A similar process should be followed when submitting an initial notice and levy information is of course also required if submitting a building control application to the Building Safety Regulator. 

If at any point there are changes to the development which affect the levy charge, the developer will need to notify the collecting authority through a levy update notice.

Also, if the client receives a levy liability notice or revised levy liability notice and believes that either no levy should be charged on the works, or the levy charge is incorrect, they can request a review from the collecting authority.

A key note to mention is that levy rates will be reviewed every three years to ensure fairness and reflect changes in land and house values.

What does the Levy mean for architects:

Although the Building Safety Levy does not directly impact architects, it does impact their clients, therefore they should stay tuned in to regulatory developments that influence project viability and client expectations. The levy could be viewed as a call to architects to engage positively and proactively with clients, local authorities and building control bodies to ensure compliance, transparency, and safety as early in a design project as possible.

Architects have an opportunity to advise clients who have pipeline schemes of 10 new dwellings or more of the brand new charge well before the levy comes into force on 1 October 2026. As mentioned, the levy will need to be factored into cost appraisals, feasibility studies, and viability calculations, and varies based on a development’s size (calculated on the floor size of a development), use, and location.

The Building Safety Levy represents a significant new regulatory and financial mechanism in England’s construction and housing system. It underscores the government’s intent to make the industry pay its share for safer homes and to permanently shift costs away from leaseholders.

To sum up what I discussed today:

• The Building Safety Levy, effective from 1st October 2026, is designed to ensure developers—not leaseholders—bear the financial burden for addressing building safety defects when the original company has not taken responsibility. This shifts industry incentives towards creating safer homes and strengthens public trust.
• The levy will apply to most new residential and certain student accommodation schemes across England on a per-square-metre basis, with higher fees in pricier regions and partial discounts for redevelopments on brownfield land.
• Only developments meeting all three strict charging conditions—scale, creation of new residential space, and non-exempt client status—are liable to pay the levy. Many types of communal residential accommodation and nonprofit housing providers are exempt, but all liable projects require timely and accurate levy information.
• The government advises developers to factor new levy charges into project appraisals, ensure all required levy information and supporting documentation is included in building control applications including details of dwellings/bedspaces, planning permissions, and development type, provide accurate client-signed statements, promptly notify authorities about changes affecting the levy, pay the full levy before completion certificates are issued, retain payment confirmation, and be aware that incomplete or incorrect submissions may result in rejected applications or withheld certificates