09/10/2026
The Building Safety Levy is a tax on certain types of new residential development in England. It came into operation on 1 October 2026 and is intended to raise funds towards the cost of addressing building safety defects.
The levy generally applies where development creates new residential accommodation, including new homes or dwellings, new bedspaces in purpose-built student accommodation (PBSA), and certain changes of use that create residential accommodation. It can also apply to certain extensions or other works where new residential floorspace is created. Developments of fewer than ten dwellings are excluded.
The levy is calculated according to the amount of residential floorspace created, using a rate charged per square metre. The applicable rate varies depending on the local authority area, with higher rates applying in areas where average house prices are higher. A discounted rate may also be available for developments involving previously developed land, where the land meets the definition set out in the regulations.
There are a number of exemptions and exclusions from the levy, depending on the nature of the development. The liability to pay generally arises when the relevant building regulations application or notice is made. However, payment is due before the relevant dwelling is completed or occupied.
Although other organisations may be involved in the building control process, such as the Building Safety Regulator or a Registered Building Control Approver, responsibility for collecting and administering the levy rests with the relevant local authority. Local authorities will subsequently pass the levy revenue to central government, after deducting allowable administration costs. The revenue is required to be used for building safety purposes.
The legal framework for the levy is primarily contained within the Building Safety Levy (England) Regulations 2025, which were made on 19 November 2025. Proposed amendments to the regulations were subsequently laid before Parliament on 2 July 2026. The associated guidance is aimed at developers, those seeking exemptions, building control bodies, Registered Building Control Approvers, the Building Safety Regulator and local authorities.
In simple terms
Where a development in England creates new residential floorspace, the developer may be required to pay a levy based on the amount of floorspace created and the location and type of development. The local authority collects the levy and passes the revenue to central government, where it is ultimately used to contribute towards addressing building safety defects. However, certain developments are excluded or exempt, including developments creating fewer than ten dwellings.
For more information on how this could affect your development and future plans, contact the Acorus design team for further information.