Government sets out initial plans for Building Safety Levy

The government is inviting comments on its proposals for the Building Safety Levy, which was initially announced in February 2021 and moves closer to being imposed.

The levy, which is expected to raise £3bn over 10 years, has been designed to ensure that taxpayers and leaseholders do not pay for the remediation of building safety defects, such as the replacement of unsafe cladding.

Under the proposals, the developers of any residential building, regardless of height, will have to pay the levy as part of the building control process before they are allowed to move on to the next stage of construction.

What are the key details within the proposal?

• The levy will apply to all residential building requiring building control and will be payable by the developer.
• There will be certain exemptions for the levy, including NHS buildings, children’s homes, refuges, and military establishments.
• The levy will be calculated on a ‘per unit’ or ‘per square metre’ basis, with different rates depending on regional land value and house prices.
• The government is proposing that developments of under 10 units, or the square unit equivalent, are excluded from the levy in order to support SMEs.
• In terms of the collection of the levy, the government suggests that local authorities should be best placed to do this.

The consultation, run by the Department for Levelling Up, Housing and Communities (DLUHC), is asking for views and evidence on the principles of the levy which will inform the final decision on the operational design and detail.

Although there has been controversy around the levy from some developers, who suggest that the levy will penalise housebuilders, “punishing innocent firms for the failures of the few”[1], many of the UK’s largest housebuilders have already pledged their commitment to fixing defects in buildings over 11 metres that they have had a role in developing, amounting to more than £2bn[2].

Commenting on the levy, Ben Cheeseman, Commercial Director at Harwood says: “Although it is early days in the consultation progress, and questions still remain around much of the detail, at Harwood we support any regulatory changes that ensure building safety risks have been fully considered. It’s vital that buildings are fit for purpose in order to keep their inhabitants safe.”

The consultation will be open for 10 working weeks, until 7^th February 2023, for views from interested parties including developers, building control professionals and local authorities. For more detail visit gov.uk.

Contact us to discuss implementation dates and transitional arrangements

Harwood will continue to provide updates as more is understood; if you’d like to speak to one of our team about how the changes or how they might impact you and the way you work, please get in touch on 01227 931 777 or email enquiries@harwood.uk.com.

[1] https://www.building.co.uk/news/housebuilders-hit-back-at-anti-development-building-safety-levy/5120617.article

[2] https://www.gov.uk/government/news/agreement-with-major-developers-to-fund-building-safety-repairs