The Building Safety Levy: what developers need to know before October 2026

The Building Safety Levy (the Levy) will come into force on 1 October 2026, following a 12-month delay. Late-stage amendments have been made to the existing regulations bringing the Levy into force. We summarise the key points below.

Background

The Levy is a tax applicable to new residential developments in England only and is payable by developers. The Levy is intended to create a building safety “war chest” to finance remediation of buildings affected by building safety defects.

The Levy is a pre-requisite for obtaining a building control certificate, making payment a necessary step towards compliance with building regulations. Without paying the Levy, a developer will not be able to obtain sign off from building control so their development cannot be occupied. The Levy must be paid prior to the earlier of occupation of the building or the issuing of a building control completion certificate.

There are 3 charging conditions to determine whether the Levy applies, all of which must be met:

1. the development must form part of a major residential development (10 or more new dwellings or 30 new bedspaces for purpose-built student accommodation (PBSA);
2. the works must create new residential floorspace (including common parts); and
3. the developer cannot be an exempt person (a non-profit registered provider of social housing).

A development will form part of a major residential development and will be caught by the Levy even if the building control application concerns a development of fewer than 10 dwellings or 30 bedspaces, but the underlying planning permission relates to a major residential development.

The Levy will be raised by local authorities who will charge on a per square metre basis applicable to the area in which the local authority has jurisdiction. The regulations provide a formula to calculate the total chargeable floor space which is then multiplied by the charge per square metre applicable in a local authority. The Levy is progressive and so it will cost less to build in Bermondsey than Belgravia.

Amendments

The amendments do not substantially change what the Levy is and how it works but seek to clarify and develop the regulations as drafted in 2025.

The key change is a discount for building on previously developed land (PDL). PDL is land where 75% or more of the land was built on at any time after 1 July 1948 unless:

• the building on the land is wholly underground,
• the building on the land is used for agriculture or forestry,
• the building that was most recently on the land was used for agriculture or forestry,
• the land has been developed for minerals extraction
• the land has been developed for waste disposal by landfill, or
• any operations carried out in, on, over or under the land were not lawful (within the meaning of section 191 of the Town and Country Planning Act 1990).

To further clarify what PDL is, the definition of “building” has been refined to include other man-made structures and erections such as roads, car parks, loading bays, pavements, airport runways, and drainage.

The government will continue to review the Levy and its regulations but has indicated that further amendments will only be made after the Levy is introduced.

How we can help

You can watch our building safety vlog series which includes an instalment on the Levy here Building safety: Navigating a changing landscape and if you would like to discuss any aspect of building safety or implications of the Building Safety Act more generally, please contact a member of our building safety team.