The Building Safety Levy

What is the Building Safety Levy?

The Building Safety Levy is a new tax on residential development. It will be collected by local authorities, as part of their building control function. Where the development is a higher-risk building (and is therefore subject to building control by the building safety regulator rather than the local authority) the levy will still be collected by the local authority for the area in which the building is situated.

It will be used to fund remediation of building safety defects in England.

The levy applies to certain planning applications and development consent order applications submitted on or after 1 October 2026. An application submitted before 1 October 2026 will not be subject to the levy, even if works start later and even if the application is varied subsequently. This means that developers considering submitting a new residential planning application have a window of opportunity to avoid the levy if they submit it before this deadline.

 

Who pays the levy?

The levy is paid by developers; it is charged on building control applications that create new dwellings and/or new bedspaces, with certain exemptions.

 

How is the levy calculated?

Levy rates have been set by the government for every local authority area, weighted by reference to average house prices.  The amount paid depends on the building's size, use and location; the charge is calculated based on the floorspace of the development, which includes chargeable communal floorspace.

 

When does the levy apply?

The levy applies to “major residential development”, which is either granted planning permission or is part of a Nationally Significant Infrastructure Project. This is defined as development that creates at least 10 dwellings, or 30 bedspaces in purpose-built student accommodation. If the development involves adding to an existing building that contains dwellings, it will constitute major residential development if it creates at least 10 additional dwellings, or 30 additional bedspaces.

Certain types of residential accommodation are exempt e.g. school accommodation, women's refuges, care homes etc.

As stated above, the levy only applies to planning applications and applications for development consent for or including major residential development submitted on or after 1 October 2026.

 

Are there any concessions available?

Yes, a site that was “previously developed” will attract a discount of 50%.  Land is defined as “previously developed” where a building was situated on the land after 1 July 1948, whether or not the building is on the land at the time planning permission is applied for.  Buildings used for agriculture, forestry or mineral extraction are ignored for the purposes of this definition.

A site will benefit from the discount where, immediately before the date on which planning permission was granted, at least 75% of the land was “previously developed”. 

 

What is the process?

Levy information should be submitted with the building control application. The building control application may be rejected if such information is not included.  The information should confirm whether the work in question comprises major residential development.

When the first commencement notice is submitted in connection with the works as required by the Building Regulations 2010, this must be accompanied by further levy information e.g. is the “previously developed” condition met, floorspace information, number of dwellings, number of exempt dwellings etc. This information will be used by the collecting authority to calculate the levy charge using the rate for its local authority area. A levy liability notice will be issued within five weeks, unless further information has been requested, or a spot check is taking place (in which latter case the relevant period is eight weeks).

 

When is the levy paid?

The levy must be paid on or before the earlier of:

• The completion notice date (being the date on which notice of completion is required under the Building Regulations 2010); or
• The first date of occupation (being the date on which a building or part of it is first occupied).

A completion certificate will not be given unless a levy liability statement has been issued by the collecting authority to the relevant building control authority confirming payment.

 

What if I don't agree with the levy calculation?

If a developer receives a levy notice, but believes no notice is due (for example because the development is exempt), or the amount charged is incorrect, then they may request a review of the decision by the collecting authority within 28 days of the notice.

 

If you require further information or have any questions, please get in touch with the authors or your usual DLA Piper contacts.