Building Safety Levy 2026: Rates, Exemptions & Costs
The Building Safety Levy: What Developers Need to Budget for Before 1 October 2026
From 1 October 2026, most residential developments of 10 or more homes in England will become subject to the Building Safety Levy – a charge per square metre of new residential floorspace, set by local authority area, that must be paid in full before a completion certificate is issued.
This is not a compliance task for the end of a project but a development cost that belongs in the appraisal from feasibility onwards. Rates run from £12.70 to £100.35 per square metre by location, the 50% brownfield discount is narrower than it looks, and payment is tied to building control completion, making it a programme risk too.
What is the Building Safety Levy?
The levy is a tax on new residential buildings in England, collected by local authorities to fund remediation of building safety defects, and part of the wider reforms introduced by the Building Safety Act 2022. The Building Safety Levy (England) Regulations 2025 were made on 19 November 2025.
Critically, liability attaches to building control rather than planning permission, a departure from the Community Infrastructure Levy, triggered on commencement, and Section 106 obligations, usually tied to occupation.
What matters is the date the building control application or initial notice is submitted. Applications made before 1 October 2026 stay outside the levy, and varying them afterwards does not bring them in. All routes are caught, local authority full plans, an initial notice through an RBCA, or a higher-risk building application to the Building Safety Regulator, and applications missing levy information can be rejected.
The levy applies in England only.
Does the levy only apply to tall buildings?
No, and this is the most common misconception. Because the levy funds cladding remediation it is widely assumed to be a high-rise measure. It applies regardless of building height, two-storey houses are as liable as an eighteen-storey block.
Which developments have to pay?
Three conditions must all be met: the works form part of a major residential development, they create new residential floorspace, and the client is not an exempt person. Fail any one and there is no charge.
A major residential development is 10 or more new dwellings, or 30 or more student bedspaces. The test applies to the planning permission, not the building control application, so seven houses within a permission for 50 are chargeable and splitting a scheme into sub-threshold applications will not work. Exempt dwellings count towards the threshold though they are not charged.
The second condition is easily overlooked and can work in a developer’s favour: a scheme can be a major residential development yet escape the charge where it creates no new floorspace. Reconfiguring ten flats into 35 student bedspaces is not chargeable.
An exempt person is a non-profit registered provider of social housing, or a wholly owned subsidiary. Everything they develop falls outside the levy; joint ventures qualify only where every party is exempt.
How are Building Safety Levy rates calculated?
The calculation is chargeable floorspace × the local authority area rate. Floorspace is Gross Internal Area measured to the RICS Code of Measuring Practice, 6th Edition, covering new dwellings, new student accommodation and the communal areas serving them. Social and supported housing is excluded. Because layout and tenure changes move the number, early quantity surveying input pays.
Communal space matters most on apartment, build-to-rent and student schemes, where lobbies, stairs and plant rooms attract the levy but earn nothing. Where an area serves both chargeable and exempt units, only a proportion is charged.
Rates are set in legislation and weighted to average local house prices.
| Local authority area | Brownfield rate | Standard rate |
| Plymouth | £12.06 | £24.13 |
| Cornwall and Isles of Scilly | £14.79 | £29.58 |
| Torbay | £13.26 | £26.52 |
| Exeter | £16.17 | £32.35 |
| Bristol, City of | £21.48 | £42.97 |
| Manchester | £14.22 | £28.44 |
| Southampton | £16.13 | £32.27 |
| Chichester | £19.99 | £39.98 |
| Maidstone | £17.58 | £35.15 |
| Sevenoaks | £21.08 | £42.15 |
| Medway | £16.12 | £32.24 |
| West Suffolk | £14.82 | £29.64 |
On twenty houses averaging 90 square metres, 1,800 square metres chargeable, that gives:
| Location and site status | Calculation | Levy |
| Cornwall, standard rate | 1,800 m² × £29.58 | £53,244 |
| Cornwall, brownfield rate | 1,800 m² × £14.79 | £26,622 |
| Plymouth, standard rate | 1,800 m² × £24.13 | £43,434 |
| Plymouth, brownfield rate | 1,800 m² × £12.06 | £21,708 |
The same twenty houses vary by more than £31,000 on location and site status alone.
Is there a brownfield discount, and will your site qualify?
Previously developed land is charged at half the standard rate, provided at least 75% of the land within the planning permission redline qualifies. Development coming forward under permitted development rights receives the discounted rate automatically, without the 75% test.
Otherwise the definition catches developers out. Land is previously developed only where a building stood on that ground on or after 1 July 1948, excluding agricultural, forestry, minerals extraction and landfill land, with no allowance for curtilage or hardstanding.
That is materially narrower than the National Planning Policy Framework definition, so retail parks, industrial estates and surface car parks often fail despite being unambiguously brownfield in planning terms. The test applies to the whole planning site, not the part being built: homes on the undeveloped corner of a mostly brownfield site get the discount, while homes on the brownfield part of a failing site do not.
Site history and redline composition need assessing at acquisition, before a discounted rate reaches the residual land value.
What is exempt from the Building Safety Levy?
Schemes below the threshold are outside the levy. Above it, two routes apply, with different administrative consequences.
Social housing, including shared ownership and qualifying First Homes, and supported housing are exempt regardless of who develops them, so Section 106 affordable housing qualifies. Levy information must still be submitted and the exemption evidenced at commencement, then confirmed at completion. If it cannot be evidenced at commencement, a Levy Update Notice can follow later.
The second route needs no levy information at all: school accommodation, domestic abuse accommodation, hospitals, children’s homes, hotels and hostels, care homes and hospices, secure residential accommodation, almshouses, temporary accommodation for homeless people, armed forces accommodation, and Ministry of Defence or Crown properties.
Mixed schemes are chargeable only on the market element: a block of 14 flats with nine social and five market-sale is charged on the five, plus their communal areas.
When is the Building Safety Levy paid?
Levy information goes in with the building control application and fuller information at commencement, after which the collecting authority issues a levy liability notice or a notice of no charge. Payment goes to the local authority where the buildings sit, before the earlier of completion certification and first occupation. Unpaid, the completion certificate can be withheld.
Partial payments are not accepted for phased schemes. The whole liability falls due before the first completion certificate, so the full amount is a cash requirement at the end of phase one rather than spread across the programme. Since completion certificates are a legal requirement above 18 metres and a standard lending condition, an unbudgeted liability delays handover and finance.
What should developers do before October 2026?
- Check the planning permission against the 10-dwelling or 30-bedspace threshold.
- Confirm the works create new residential floorspace.
- Establish whether building control submission falls before or after 1 October 2026.
- Identify the local authority rate and test the site against the 75% previously developed land definition.
- Calculate chargeable Gross Internal Area and separate chargeable, exempt and communal floorspace, with building surveying input where existing buildings are involved.
- Establish which exemption route applies and gather its evidence.
- Put the payment in the cost plan and cash flow at the point it falls due.
- Agree who carries levy risk under any forward funding, joint venture or design and build deal.
The levy belongs in land appraisal too, a cost missing from the residual land value becomes a viability problem later.
Building Safety Levy FAQs
When does the Building Safety Levy start?
It applies in England to building control applications and notices submitted on or after 1 October 2026. Earlier applications stay outside it, and varying them afterwards does not bring them in.
How much is the Building Safety Levy?
Chargeable Gross Internal Area multiplied by the local authority area rate. Rates run from £12.70 per square metre in County Durham to £100.35 in Kensington and Chelsea, halving on qualifying brownfield land.
Is my site brownfield for Building Safety Levy purposes?
Not necessarily, even if it is brownfield in planning terms. Land qualifies only where a building stood on that ground on or after 1 July 1948, with no allowance for hardstanding, and 75% of the planning redline must qualify.
Does the Building Safety Levy apply in Scotland?
The English levy applies in England only. Scotland has legislated separately through the Building Safety Levy (Scotland) Act 2026, intended to take effect from 1 April 2028 and collected by Revenue Scotland on a different mechanism.
Talk to us about your development
If you have residential schemes in design now, the building control submission date is the single biggest variable in your levy exposure, and it is still within your control.
Bailey Partnership works with developers across residential development, purpose-built student accommodation and fire engineering and building safety. We can review your pipeline, calculate likely liability scheme by scheme and identify which applications are worth accelerating ahead of 1 October 2026, the same approach to cost management we bring to every project.
Contact Bailey Partnership to arrange a review.