A step closer to the Building Safety Levy: a first glimpse at the new draft laws

A building safety levy, to raise funds to remediate unsafe buildings, has been under discussion in England for some time - but now we're one step closer, as the draft Building Safety Levy (England) Regulations 2025 (draft Regulations) have now been laid before Parliament.

These draft Regulations are complex and, if printed, would run to 111 pages. 

Under them payment of the levy would need to be made from Autumn 2026, and will impact the viability of projects – challenging for developers, but also for the government which has pledged to substantially increase the number of houses to be built. However, this is balanced against the urgent need to remediate buildings post-Grenfell.

We have looked at the draft Regulations, to give you a very high overview.

When is it charged?

From 1 October 2026, when the draft Regulations come into force. The draft Regulations state they "do not apply in relation to any building control application made before the day on which these Regulations come into force".

What is it charged on?

Very broadly, on all new "major residential developments", regardless of height, defined as being at least 10 new dwellings or 30 new bedspaces for purpose-built student accommodation. It includes retirement housing too. And it will apply to conversions and reconfigurations if new residential floorspace is created.

What are the exemptions?

There's a long list of exemptions, including affordable housing, homes built for not-for-profit registered providers of social housing, care homes, hotels and hostels, hospitals, and supported housing. More exemptions can be found in Schedules 1 and 2 of the draft Regulations.

What is the charging basis?

Similar to the Community Infrastructure Levy, the building safety levy is based on the Gross Internal Area. The draft Regulations cover this calculation in much detail - and rates have been published by local authority area and considerably vary (as they have been determined using average house prices in each area). The rates are in Schedule 3, and will reviewed every 3 years with a report published by the Secretary of State.

Are there discounts?

Yes, previously developed land (as defined in the draft Regulations) will be charged at 50%. The relevant rates are in Schedule 3. 

How will it be paid?

Detailed information will need to be provided, at building control application / initial notice stage, to the local authority (LA) in which the majority of the development is located. The LA will then be responsible for determining whether the levy is payable, and collecting it. The levy cannot be avoided by making multiple applications for fewer than 10 dwellings or 30 bedspaces where the planning permission has been granted for a "major residential development". The LA will issue a "levy liability notice" (stating the levy amount) or a "notice of no charge" within five weeks.

What happens when there are changes to the development?

Changes to construction works are common, but if they do, the levy may change – so the draft Regulations require a "variation application" in some circumstances, even if there is no change to the area being developed. The levy charge will be reviewed and a revised notice issued in around five weeks. If the charge decreases, and payment has already been made, a refund will be made within two weeks of that revised notice.

When should the levy be paid?

The client pays the levy on or before the earlier of:

• Submission of the notice or application required at building control completion stage under existing legislation
• The first date of occupation.

Are there sanctions for non-payment and failure to provide information?

If no levy information is provided at building control application stage, the application will be rejected. Levy information spot checks can also be carried out by the LA to ensure that the levy information is accurate in which case the LA has eight weeks to consider liability for the levy. Until the levy has been paid in full, the building control completion certificate will not be issued.

What if there is a dispute about the amount?

The LA can be asked to review its decision within 28 days of issuing the levy liability notice. If still not satisfied or the LA fails to respond within 28 days of that request, an application can be made to the First Tier Tribunal within 28 days of the reviewed decision or on the day by which the LA should have responded.

What happens next?

Parliament is considering the draft Regulations (and may make amendments).

On the draft Regulations current terms, subsequent amendments will also be made to:

• The Building Regulations 2010
• The Building (Registered Building Control Approvers etc) (England) Regulations 2024, and
• The Building (Higher-Risk Buildings Procedures) (England) Regulations 2023.

LAs will need to prepare to administer and collect the levy, with government funding to assist. This preparation will be key to prevent processing delays like those the industry has experienced at building control Gateway 2.

Developers will need to factor in the cost of both the new levy and providing the additional information for their projects going forward. This is an upfront charge so projects which take a longer time to generate profit, such as build-to-rent, may initially become less attractive to investors. In the meantime, there is likely to be a rush to submit building control applications before 1 October 2026.

The government's Building Safety Levy: Guidance provides further helpful information for LAs, developers, and registered building control approvers.

Finally, keep an eye out for further changes – for example the Scottish government's plans to introduce its own building safety levy from 1 April 2027, with its Bill currently in the Scottish Parliament.

For more on building safety, visit our Building Safety Hub.