The Government has confirmed that a Building Safety Levy (BSL) will come into force for residential development in England from 1 October 2026.
The levy forms part of the wider building safety reforms introduced following the Grenfell Tower tragedy and is intended to raise funding to remediate unsafe residential buildings.
For residential developers, the levy introduces a new cost associated with the building control process, and the timing of building control applications will become a critical consideration over the next 12 to 18 months.
Sophia Piatto, Planner at Vail Williams, summarises what the levy is, how it will operate and what it could mean for development projects.
What is the Building Safety Levy?
The Building Safety Levy is a charge on certain new residential developments, payable as part of the building control process.
Local authorities will be responsible for collecting the levy, which must be paid before a building completion certificate can be issued.
The Government expects the levy to generate around £3.4 billion nationally, which will be used to fund the remediation of unsafe residential buildings where leaseholders would otherwise face costs.
The levy will apply to a wide range of residential development, including:
- Private residential schemes
- Build-to-rent developments
- Residential conversions
- Purpose-built student accommodation; and
- Mixed-use developments that include residential floorspace.
It will not apply to smaller schemes or certain types of development, including most affordable housing provided by registered providers.
When does it apply?
The levy will apply to building control applications submitted on or after 1 October 2026.
Sophia commented: “This is a key point for developers. If a building control application is submitted before this date, the levy will not apply to that scheme, even if construction or completion occurs later.
“The timing of building control submissions may become a significant strategic consideration for projects currently progressing through early design and technical development stages, as the levy is triggered only at the point of submitting a valid building control application.”
Which developments will be affected by the New Building Safety Levy?
The levy will only apply to major residential developments, defined as schemes delivering:
- 10 or more dwellings, or
- 30 or more student accommodation bedspaces.
and where the building control application creates new chargeable residential floorspace.
As mentioned earlier, smaller residential schemes will be exempt.
“The charge will be calculated per square metre of residential floorspace, including communal areas. However, there is some uncertainty around the financial impact of this, since the exact rates will vary across the country, reflecting differences in local property values, and will be set nationally but applied by local authorities,” explained Sophia.
The Government has also confirmed that brownfield developments will benefit from a reduced levy rate, recognising the higher cost of bringing forward these sites.
What are the implications for developers?
The introduction of the levy adds another layer to what is already a complex cost environment for residential development, sitting alongside Community Infrastructure Levy (CIL), Section 106 obligations and other regulatory requirements.
