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The Building Safety Levy explained — who's affected & what it means for developers

AuthorsErika JohnsonBarnaby Prees

4 min read

Property & Construction, Regeneration

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The Building Safety Levy (England) Regulations 2025 (the Levy) came into force on 1 October 2026, introducing a new financial obligation for developers undertaking residential development projects in England. 

This forms part of the Government's wider building safety reform agenda following the Grenfell Tower tragedy and is intended to ensure that the construction industry contributes towards the cost of remediating historic building safety defects, while reducing the burden on leaseholders and taxpayers. 

Here, Erika Johnson and Barnaby Prees from our construction team explore what the Levy is, which developments are in scope, how charges are calculated and the practical steps that developers should take now.

 

What is the Building Safety Levy?

The Levy is a charge payable by developers on certain residential developments. It’s intended to fund building remediation work like cladding and support social housing where the developers responsible for defective work can’t be identified or held liable.  

 

Which developments are in scope?

Under the Government’s charging framework, the Levy will generally apply to developments classified as “major residential developments”. This covers developments where the overall planning permission includes ten or more new dwellings or 30 or more new bedspaces. The Levy applies unless the development falls within one of the exceptions (for example, for social housing). 

As a result, many residential and student accommodation developers will be caught by the new regime.

 

Exemptions & special cases

Registered providers of social housing and their wholly owned subsidiaries are exempt — even where the Levy would otherwise apply to the development.

However, registered providers won’t benefit from the exemption where they procure a development by way of a joint venture with a non-exempt entity. 

 

How is the Levy calculated & when is it payable?

The amount payable is calculated using the applicable Levy rate and chargeable residential floorspace being created by the development. Levy rates will vary by local authority area. A 50% discount is applied where the development is on a previously developed site. 

While the application depends on the planning permission granted, the Levy is determined and enforced as part of the building control process. Where the work relates to one or more new dwellings, applicants will need to provide Levy information[EL1] .

The application should include:

  • The number of dwellings that the works will provide.
  • The planning permission.
  • Whether the works are major residential development.
  • The relevant collecting authority information for the regular route.
  • For an initial notice submitted on the client’s behalf, the client’s signed confirmation that the Levy is accurate. 

A missing-information application may be refused and a local authority must reject an initial notice if it doesn’t contain the required information.

The Levy becomes payable on the earlier of the: 

  • completion notice date 
  • first date of occupation of one or more of the dwellings. 

 

Practical steps for developers

Given the potential scale of these costs, developers should ensure that Levy payments are considered at an early stage when preparing project appraisals, viability assessments and development budgets.

As the Levy will become payable on the first date of occupation of one or more of the dwellings, those subject to the Levy will need to consider how best to structure any proposed handover in order to preserve project cash flow.

You should also check exemptions carefully. If you’re a registered provider of social housing, confirm whether your project structure (for example, any joint venture arrangements) affects eligibility for exemption.

 

Talk to us

With the Building Safety Levy now in force, those involved in residential development should be aware of how the new regime may affect project planning, costs and delivery.

Our construction and regeneration teams can help you to understand how it applies to your project and what steps that you may need to take.

To discuss how we can support you, call 0333 004 4488, email hello@brabners.com or fill in our contact form.

Erika Johnson

Erika is a Paralegal in our construction team.

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    Barnaby Prees

    Barnaby is a Senior Associate in our construction team.

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