On 1 October 2026, the Building Safety Levy Regulations come into force in England.
The Levy Regulations operate as a new tax on residential buildings. The tax is collected by local authorities through the building control process. The aim of the Levy is to raise approximately £3.4 billion to pay for cladding remediation following the Grenfell tragedy in 2017. Government minsters currently expect the Levy to last for at least 10 years.
This is a new and mandatory charge which is not negotiable. Subject to specified exemptions, it will affect all new residential developments requiring building control approval (including changes of use/extensions) providing above 10 homes or, for purpose-built student accommodation, 30 bed spaces.
Exemptions to the Levy are available for defined tenures of social housing, supported housing, and other specific forms of development, such as schools, hospitals and care homes. There is a 50% brownfield development discount for developments that meet specified conditions, and the Levy rate will be subject to geographical rates. For example, in Levy terms, it will be nearly eight times more expensive to building in Kensington & Chelsea than it will in County Durham.
The Levy will be independent of other taxes and levies on residential development, including the Community Infrastructure Levy and S106 mitigation.
The government has produced accompanying explanatory guidance on how the Levy Regulations will operate and a series of flowcharts. Amendment Levy Regulations have also been finalised, chiefly concerned with clarifying the definition of brownfield development to bring hardstanding areas into the scope of the discount, and will also come into force in England on 1 October 2026.
Information required to calculate the Levy (based on GIA of new floorspace and calculated by the RICS Code of Measuring Practice) will need to be provided as part of a building control application to the relevant building control approver. The Levy must be paid to enable building control completion certificates to be issued and to allow new development to be occupied.
The Levy process applies to full plans applications made to Local Authority Building Control, initial notices submitted with Registered Building Control Approvers, and higher-risk building applications (for developments that are at least 7 storeys or 18 metres in height) made to the Building Safety Regulator.
The Government has acknowledged that the Levy does not currently apply to building notices given to the local authorities under regulation 12 of the Building Regulations 2010. It is currently intended that building notices will be brought within the scope of the Levy Regulations, but timescales for this are unclear and the Government has confirmed any such changes would not come into force on 1 October 2026.
Similarly, while the Home Builders Federation has published research suggesting that the Levy will account for an average £2,320 increase in the cost of building a new home and has advocated for an exemption for SMEs in line with the new National Planning Policy Framework definition of “medium development” (i.e. 10-49 homes developments), this has not materialised.
The process and administration of the Levy is largely based on the Community Infrastructure Levy (CIL) Regulations. As such, there are some familiar terms and procedures but there are also some key differences.
With significant expertise advising on the CIL Regulations over the last 14 years, the WS planning team has the knowledge and expertise to help you with any queries and advice required in relation to the application of this new Levy charge.