SME’s housebuilders, are you prepared for the Building Safety Levy?

There has been recent news (24th March 2025) on the Building Safety Levy, published by the government, in response to its consultation on the levy. Included in the response is information on how the levy is to proceed. This is a run down on the key features and what you need to be aware of. The levy regulations are to be laid out in Parliament later on this year but for now this is what we know. The importance for you is to know that your contracts and valuations need to take account of the pending legislation due to take effect in the Autumn of 2026. It is believed 18 months is enough time for housebuilders to prepare for the levy. 

What will be charged? 
The levy will be a charged on new residential buildings that require building control approval in England. This includes mixed use and applies no matter what the height of the building. 

Are there any exemptions?  
Certain developments will be exempt and includes affordable housing, care homes, children's homes, domestic abuse shelters and developments with fewer than 10 residential units. In addition there will be a 50% reduced rate qualifying developments that are built on previously developed land. 

Who will pay? 
The levy will be paid by “a person or organisation for whom a construction project is carried out”.

How much? 
The calculation is based on the floorspace of the development and includes communal areas. There will be a government selected standard rate per sq metre. The rates for each local authority have been appended to the governments response, Building Safety Levy: Technical consultation response, found on the gov.uk website. This means that if you currently know the approximate GIA you can get an idea of the charge. However any certainty at the actual charge will be when the local authority issues a notice of levy liability. It is a local authority responsibility to calculate the sum. 

When to pay?
Once you have received the liability notice you are required to pay before first completion or final certificate for the works under the application or notice. It is expected to be a one off payment. You will not receive a building control completion certificate without payment and it will be two weeks in between payment and confirmation so this will need to be planned carefully with any plot sales.

If you require any advice on how the levy should be incorporated into your purchase contracts and options please do get in contact.