Technical consultation
On 24 March 2025, the Government issued the response to their technical consultation, published in early 2024, on the Building Safety Levy. The response included a summary of the feedback received to the consultation and the levy rates for each local authority.
The technical consultation covered::
- methodology for levy calculation
- the collection process
- disputes and appeals
- further exclusions (hotels, religious accommodation, hospices, private hospitals and other specified types of communal accommodation)
Secondary Legislation will now be drawn up to underpin the levy. As the levy requires an Affirmative Statutory Instrument, the Secondary Legislation needs to be debated and approved by both Houses of Parliament before it can be signed into law and brought into effect.
The levy will be implemented in Autumn 2026, which the Government believes will give local authorities and developers time to prepare.
The Residential Funds Working Group and Tax Committee will continue to monitor how the Building Safety Levy may affect AREF's members.
Background
The Government published its initial open consultation on the Building Safety Levy in the summer of 2021. This consultation sought views on the design and calculation of the proposed Building Safety Levy, through which it is proposed developers would make a contribution to remedy historical building safety defects. Please note that the proposals relate to England only. With the assistance of AREF’s Residential Funds Working Group and Tax Committee, AREF submitted a response to the consultation. Within the response we referred to the Residential Property Development Tax (RPDT) consultation; more details about RPDT can be found here.
In April 2022 the Government published a Building Safety Levy Factsheet which detailed the actions the Government was taking to ensure building safety. This included the introduction of a Building Safety Levy.
The policy paper: Building safety: remediation and funding - government response to the Select Committee reports. was published in May 2022. This explained the actions being taken by the Government in response to reports published by the Levelling Up, Housing and Communities Select Committee following its inquiries into cladding remediation and building safety remediation and funding in England.
In June 2022, the Government published a consultation on proposed Higher Risk Buildings (Descriptions and Supplementary Provisions) Regulations which complete the definition of higher-risk building for the new Building Safety Regime.
Between November 2022 and February 2023, the Department for Levelling Up, Housing and Communities (DLUHC) consulted on the Building Safety Levy. This open consultation sought views on the design and implementation of the Building Safety Levy. AREF didn't respond to this consultation. On 23 January 2024, the Government published its response to this Building Safety Levy consultation. The Governments' conclusions were:
- There will be a differential levy rate based on house prices in local authority areas, and a discount of 50% for developments on brownfield sites.
- Local Authorities will act as the collection agents for the levy.
- There will be a single levy payment and not a two-step payment as proposed.
- The consequence for non-payment of the levy will be withholding or rejection of final certification on a development.
- The process for collecting the levy will be set out in secondary legislation.
- The Government intend to charge the levy on a per square metre basis, subject to further work on how floorspace would be measured and levy rates set.
- Build to rent developments, purpose-built student accommodation and retirement housing will be within the scope of the levy.
- The Government intend to exempt developments of fewer than 10 units from payment of the levy. For purpose-built student housing, the exception will be where there are fewer than 30 bedspaces.
- The following developments will be exempt from the levy:
- affordable housing, including social rented, affordable rented and intermediate housing, provided to specified eligible households whose needs are not met by the market
- non-social homes built by not-for profit Registered Providers (and their subsidiaries) as it is a component of their operating model to provide more affordable homes and to reinvest profits to benefit social/ affordable housing tenants
- NHS hospitals, NHS medical homes, and NHS GP practices
- supported housing (save for private tenure supported housing)
- children’s homes
- domestic abuse facilities
- criminal justice accommodation
- accommodation for our armed forces
- care homes and nursing homes
- Regulations and guidance will set out the detailed information that developers will be required to submit in order to qualify for the exemptions.
- Improvements to owner occupied homes and refurbishments will be excluded too.
- The levy will be charged on conversions/change of use, where buildings are being converted to residential use, subject to these not falling within other exemptions.
- The Government do not intend to set a discounted levy rate for the entirety of a development because it provides a specified proportion of affordable homes.
- Developments that have already submitted an application for building control approval or initial notice on or after the levy launch date will be subject to the levy charge if they don’t meet an exemption requirement.
- There will be a review of the levy every 3 years.
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