Safety In Numbers? Understanding The UK's Proposed Building Safety Levy

In Short

The Situation: The Building Safety Levy ("BSL") will be a charge on most new residential developments in England, payable by the developer prior to completion of the works, collected by local authorities and transferred to central government to fund building safety remediation.

The Development: The draft Building Safety Levy (England) Regulations 2025 ("the Regulations") were laid in Parliament in July 2025, and commencement is expected on 1 October 2026. The BSL will apply where building control approval is sought for qualifying residential works that meet three charging criteria. There will be defined exemptions by building type, use and developer status and discounted rates for previously developed land. Rates will be set per local authority, weighted by local house prices. Non‑payment will block completion/occupation.

Looking Ahead: No transitional relief will apply. Chargeable building control applications submitted on or after 1 October 2026 will be liable to pay the BSL, unless they are merely pre‑commencement variations of earlier applications.

Scope

The BSL applies to residential development in England above a de minimis threshold and includes higher‑risk (i.e., tall) buildings, retirement housing, build‑to‑rent, purpose‑built student accommodation ("PBSA"), mixed‑use schemes with residential floorspace and low‑rise residential developments. The developer (the party making the building control application) is liable to pay the BSL. Local authorities with building control functions will collect the BSL.

The Regulations were laid in July 2025 and remain subject to Parliamentary approval.

The BSL is expected to commence on 1 October 2026.

Chargeability

A building control application is potentially chargeable where:

• The building is in England;
• It consists of, or contains, one or more dwellings or one or more PBSA bedspaces; and
• It is not an exempt building.

The BSL charge applies only if all following three charging criteria are met:

1. The related building work would result in: (i) a new building with residential floorspace; (ii) residential floorspace introduced into a building that previously had none (extension or change of use); or (iii) an increase in total residential floorspace within an existing building (extension or change of use).
2. The related work is, or is part of, a "major residential development": (i) at least 10 new dwellings; or (ii) for PBSA, at least 30 new bedspaces.
3. The developer is not an exempt person (see "Exemptions" below).

Applications solely for extensions or improvements that create no new dwellings or PBSA bedspaces do not need to provide levy information, and the collecting authority need not issue a notice of no charge.

Timing

Developers submitting an application for building control approval on or after 1 October 2026 may be liable to pay the BSL. There is no transitionary period.

The BSL will not apply to existing applications for building control approval that were submitted before 1 October 2026. If such existing applications are varied after 1 October 2026 (for example, via a further full plans application for the same works, amendment notice or change control application), the BSL would not apply to such applications.

If, however, based on current guidance, the building control approval was rejected or an existing building control approval lapsed necessitating the need to submit a new application on or after 1 October 2026, then the BSL would apply.

Given the above, we are expecting a rush by developers to make building control applications prior to 1 October 2026 to avoid the BSL.

Exemptions

The following exemptions will apply:

1. Works that are out of scope—i.e., it involves less than 10 dwellings or less than 30 bedspaces for PBSA.
2. Works to "exempt buildings" which include school accommodation, care homes, secure residential institutions, hospitals and hotels.
3. Works for exempt uses: (i) social housing; (ii) supported housing—i.e., housing provided by a local authority, housing association, charity or voluntary organisation; (iii) exempt accommodation. This is the same list as for "exempt buildings".
4. Involves "exempt persons" which are non-profit registered providers of social housing and/or a company that is a wholly owned subsidiary of a non-profit registered provider of social housing. Joint ventures ("JV") are not exempt unless each party to the JV is exempt. A JV between a developer and a registered provider (of social housing) would not be exempt.

Rates and Process

Rates. The amount payable will vary depending on the building's size, use and location. The government has set the BSL rates for each local authority area in legislation. The rates have been weighted using average house prices in local authority areas, so that areas with the highest average house prices have the highest BSL rates, and those with the lowest average house prices have the lowest BSL rates. For example, Kensington and Chelsea will be subject to the highest rate (£100.35 per square metre), with County Durham adopting the lowest rate (£12.70 per square metre). The secretary of state will have the power to review these rates periodically.

The BSL is calculated on the chargeable floorspace of the development which is measured using the gross internal area ("GIA"). The chargeable floorspace includes communal areas that are used wholly or mainly by residents of the chargeable units (but not public areas).

There is a 50% discount to standard rates for developments on land that meet the definition of "previously developed".

Process. The developer will be required to submit information which will allow the collecting authority (local authority) to calculate BSL liability. In particular:

• At application/initial notice stage, information will be required as to the number of dwellings which will be created, or bedspaces in the case of PBSA, and the related planning permission. Failure to provide this information will be a ground for the rejection of an application for building control approval or initial notice.
• At the works commencement stage, information will be required as to whether any exemptions apply, whether the development is on previously developed land, as well as the GIA of the chargeable floorspace of the development, including communal areas.

The local authority will be required to calculate the BSL within five weeks (or such other period agreed between the parties) of the submission of the BSL information and other required information as part of the works commencement stage. The local authority will then issue the developer and, where applicable, the Registered Building Control Approver ("RBCA") with a " levy liability notice" or confirmation that the BSL is not applicable.

BSL becomes payable when a levy liability notice is given in relation to the application. The BSL must be paid before the earlier of:

• Submission of the notice or application required at completion stage
• The first date of occupation.

Failure to pay the BSL will delay the relevant completion certificate (whether from the BSR or local authority building control), or where the RBCA has issued the final certificate, the local authority must reject it. This will delay completion and occupation.

The exact process varies depending on the type of building—i.e., HRB or non-HRB and applicant.

Looking Ahead

Commencement on 1 October 2026 with no transitional relief will focus developers on application timing and on avoiding lapses or rejections that would trigger a fresh post‑commencement application.

The different rates per local authority area and the 50% brownfield discount may materially affect scheme viability and site selection.

Administratively, local authorities will need robust processes to assess GIA, exemptions, discounts and to coordinate certificate issuance with payment status.

Five Key Takeaways

1. The BSL is expected to commence on 1 October 2026 with no transitional relief. We envisage developers will seek to submit building control applications before that date if they can.
2. Chargeability requires residential floorspace creation/increase, a major residential development threshold (10 dwellings or 30 PBSA bedspaces) and a non-exempt developer.
3. Extensive exemptions apply by building type, use and developer status.
4. Rates are set per local authority and calculated on GIA of chargeable floorspace, with a 50% discount for previously developed land.
5. Payment must be made by the earlier of the submission of the notice or application required at completion stage or first occupation. Non‑payment will block completion/final certificates and delay occupation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.