Building Safety Levy 2026 looms

Building Safety Levy – From 1 October 2026

The Government’s Building Safety Levy (BSL) is due to come into force on 1 October 2026. The levy represents a further development cost for qualifying residential schemes and should be factored into project appraisals, viability assessments and development programmes.

The levy will be collected by local authorities and will apply to certain developments in connection with specified building control applications and notices.

Which developments are within scope?

The BSL will generally apply to developments involving:

• 10 or more new dwellings; or

• 30 or more new bedspaces in purpose-built student accommodation (PBSA).

Importantly, the regime also captures qualifying changes of use to residential purposes.

Certain building uses and developments are exempt, and the detailed statutory exemptions should therefore be considered on a project-by-project basis.

Levy rates in Cornwall and the Isles of Scilly

The levy is calculated by reference to the floorspace of the development, applying the relevant rate per square metre.

For developments in Cornwall and the Isles of Scilly, the rates are:

Development land Levy rate

-Non-previously developed land - £29.58/sqm

-Previously developed land - £14.79/sqm

The distinction between previously developed and non-previously developed land can therefore have a material impact on the levy payable.

Building control applications affected

From 1 October 2026, information relating to the BSL will be required in connection with certain building control applications and notices, including:

• Building Control Approval with Full Plans applications;

• applications relating to Higher-Risk Buildings;

• Initial Notices; and

• certain updated applications, where the original application was submitted on or after 1 October 2026.

The timing of building control submissions will therefore become an important consideration for developers with schemes approaching the approval stage.

Financial and viability implications

The BSL comes at a time when development costs and regulatory requirements are already placing significant pressure on project viability.

Research undertaken by the Home Builders Federation (HBF) indicates significant concern among SME housebuilders about the effect of the levy. The research found that 91% of respondents considered that the levy could make developments financially unviable, while 36% reported having already delayed, redesigned or cancelled schemes in anticipation of its introduction.

The HBF has also reported that the cost of delivering a typical new home has increased substantially since 2020, with the BSL representing an additional cost alongside other taxes, levies, regulatory requirements and construction-cost inflation.

For marginal schemes, the additional levy may therefore affect:

• residual land value;

• development margins;

• funding requirements;

• scheme design and density;

• acquisition decisions;

• development phasing; and

• the overall viability of bringing a site forward.

Practical considerations for developers

Developers should now review projects that may fall within the scope of the BSL and consider the following:

1. Review the development threshold

Confirm whether the proposed scheme reaches the relevant threshold of 10 or more dwellings or 30 or more PBSA bedspaces, including where residential use is being created through a change of use.

2. Establish the applicable levy rate

Determine whether the site constitutes previously developed land for BSL purposes and identify the applicable geographical rate.

3. Calculate the potential liability

The potential levy should be incorporated into the development appraisal based on the relevant chargeable floorspace. Developers should avoid treating the levy as an immaterial additional cost, particularly on schemes with tight margins.

4. Review the building control programme

Where a project is sufficiently advanced, developers should consider the interaction between the planned submission date and the commencement of the BSL regime. The applicable transitional provisions and statutory requirements should be reviewed carefully rather than assuming that bringing forward a submission will necessarily remove the liability.

5. Revisit viability assessments

Existing viability appraisals prepared before the introduction of the levy may need to be updated. The additional cost should be considered alongside other changes to construction costs, finance costs, planning obligations, infrastructure contributions and regulatory requirements.

6. Consider the levy during design development

For schemes still at the design stage, the BSL should be incorporated into option appraisal. Changes to unit numbers, floorspace, development mix or site layout may affect the overall levy exposure and should be considered alongside planning and viability objectives.

7. Coordinate with the professional team

Architects, planning consultants, building control advisers, quantity surveyors and funders should be made aware of the potential liability where relevant. The levy should be reflected consistently in the development programme, cost plan and financial model.

Key takeaway

The Building Safety Levy introduces a further cost and administrative consideration for qualifying residential development from 1 October 2026.

For developers, particularly those bringing forward smaller or marginal schemes, it will be important to establish the potential liability at an early stage rather than waiting until the building control submission is prepared.

Developers with schemes currently being appraised, designed or prepared for building control submission should review the potential BSL liability now and consider whether it has been appropriately reflected in project costs, viability and programme assumptions.

This provides a general overview of the Building Safety Levy and is not a substitute for project-specific legal, planning, tax or building-control advice. The application of the levy, including exemptions, transitional provisions and the calculation of chargeable floorspace, should be confirmed against the legislation and applicable guidance for the particular development.