Ministers will push ahead with the £3.5 billion post-Grenfell Building Safety Levy, despite concerns from the Home Builders Federation (HBF).
Following the Grenfell Tower tragedy, the levy aims to improve the safety of infrastructure and ensure leaseholders and taxpayers avoid picking up the cost of historical safety defects.
However, housebuilders have raised concerns over the extra financial burden on developers.
Here’s a quick recap of the levy, the HBF’s letter, and the Government’s response.
Building Safety Levy
The Building Safety Levy, first introduced by the previous housing secretary Michael Gove in 2021, requires developers to pay a fee on new housing developments that require building control approval.
The levy falls under legislation in the Building Safety Act 2022 and is due to be implemented later this year, with the expectation of raising £3.5 billion in tax.
The HBF presented a letter to the Chancellor calling on the levy to be reconsidered.
The letter, which was signed by more than 100 housebuilders, described the levy as a “nakedly anti-development new tax” that “has raised significant concerns from all areas of the new build sector.”
HBF argued that the levy would “threaten the existence of some hard-pressed SME home builders” and lead to a “serious reduction” in housing delivery, compromising the Government’s mission to build 1.5 million new homes.
Speaking to Construction News, a spokesperson for the Government rejected this claim: “It is not the case that the building safety levy will prevent us from meeting this [1.5 million] target.”
They added: “It is right that we protect leaseholders and taxpayers from the costs of fixing unsafe cladding and that developers contribute their fair share.”
Whether you work within the construction industry or require property to be built, it is imperative that the project is completed on time and to budget.
Our construction law specialists can help you mitigate the impact of the Building Safety Levy and advise you at every stage of the project, from drafting of contracts through to completion.
If you’re worried about how the Building Safety Levy could affect you, please contact us for tailored advice and guidance.