We will be providing focussed updates relevant to the Build To Rent sector and BTR developers in our regular Egen newsletter. This first update covers the treatment of BTR development in the Government’s proposed building safety levy.
On 23 January the Government published its response to initial consultation on the proposed building safety levy. This is intended to be a further new levy introduced through the building control regime to enable the Government to raise £3 billion pounds over 10 years towards building safety remediation. It will be charged on new residential development with limited exceptions.
In the consultation paper which closed back in February 2023 the Government asked whether BTR development should be subject to the levy. Responses were mixed with some noting it would be unfair to treat BTR differently to for sale units thus providing a competitive advantage given BTR is profit making. The Government agrees and has confirmed that BTR development will be in scope and will be charged the levy.
Exclusions from the levy will be limited. They include affordable housing and NHS facilities. They also include private homes built by not for profit RPs only. There will be no discounted rate for the entirety of a development that contains a proportion of affordable housing as previously mooted. Development on brownfield land will however be charged at 50% of the levy rate, and rates will vary between local authorities reflecting differing land values.
Further consultation will be published focussing on the methodology for calculating the levy – hopefully this will answer the million dollar question – how much will the levy be….