From 1 October 2026, the Building Safety Levy (BSL) is set introduce a new financial and administrative requirement for residential developers across England.
The Levy is part of the Government’s response to building safety concerns and is intended to raise funds to remediate unsafe buildings and ease the financial burden that some leaseholders face.
With the BSL’s implementation coming this year, developers and landowners should review their future projects to understand how it will affect them and what steps can be taken to prepare.
What changes are coming?
Unlike previous safety measures that only targeted tall or high-risk buildings, the Levy will now cover any development of 10 or more dwellings or PBSA schemes with 30 or more bedspaces.
The BSL is calculated based on the gross internal floor area of residential units, including communal areas primarily used by residents.
Rates will also vary by local authority and discounted rates will apply to developments on previously developed land, provided at least 75 per cent of the site qualifies as brownfield land.
Any application for building control approval that is submitted on or after 1 October 2026 that meets the Levy conditions will be subject to the charge.
Any applications submitted before this date, even if variations are made later, will not be affected.
Who will be affected by the Building Safety Levy?
The Levy will affect developers, investors and landowners involved in residential development and this includes developers of build-to-rent schemes, student accommodation and private residential housing.
The cost of the Levy is likely to be factored into development appraisals and may affect land values and end sale prices.
However certain projects and developers are exempt, including social housing, supported housing, care homes, schools and schemes with fewer than 10 units.
Exempt projects must be supported with clear evidence and joint ventures involving non-exempt parties may leave you liable.
With the legal support, we can help advise you on whether your development falls within the scope of the Levy and whether any exemptions apply.
How can you prepare for the Levy?
With less than a year to implementation, it is crucial for developers and stakeholders to:
- Review development pipelines and identify projects that will likely incur the Levy.
- Update financial models to include potential Levy costs and assess impacts on project viability.
- Plan building control applications to in accordance with the upcoming deadlines.
- Consider site selection and land type, as brownfield sites may receive a discounted rate.
- Gather supporting documentation for exemptions to maintain compliance and avoid delays.
How can we help you prepare?
Our expert team can help assist you with drafting and reviewing your development agreement and sale contracts so that the responsibility for the Levy is clearly allocated between parties.
We can provide due diligence to help spot any potential risks or Levy liabilities and assist you with any disputes or appeals that arise.
With the right legal support, you can ensure your developments remain viable and compliant when the Levy comes into effect.
If you need advice on how the BSL will affect your project, contact our Construction Law team today.