Building Safety Levy draft regulations published – what this means for your project

As part of the ongoing efforts under the Building Safety Act, the Building Safety Levy (BSL) draft regulations have recently been laid before Parliament, marking a significant milestone toward safer buildings across England. Set to come into effect on 1 October 2026 (later than previously anticipated), the BSL is expected to raise approximately £3.4 billion over the next decade. This fund will directly support the remediation of historical building safety defects, providing safer communities and resilient infrastructure.

The updated regulations and guidance documents provide significantly more detailed and specific requirements. Developers must pay close attention to revised applicability criteria, clearer exemption definitions, levy calculation based explicitly on floorspace, and detailed administrative compliance procedures.

Developers should also prepare for substantial implications, as these regulations could add significant costs to new residential housing developments. Below, Ben Cheeseman, Commercial Director at Harwood Building Control, outlines key aspects of the new regulations, what they entail for developers, and how we will guide clients through this transitional phase.

Who does the levy apply to?

The levy primarily impacts major residential developments, specifically defined as:

• New buildings providing at least 10 residential dwellings or 30 bedspaces in purpose-built student accommodation (PBSA).
• Existing buildings undergoing work resulting in an increase of at least 10 dwellings or 30 bedspaces compared to their pre-development state.

Exemptions

These exemptions aim to ensure the levy targets commercial residential developments while safeguarding social priorities.

Certain types of residential developments are explicitly exempt:

• Social housing, including affordable rent, social rent, shared ownership, and First Homes.
• Supported housing, provided explicitly by local authorities, housing associations, charities, or voluntary organisations.

Specific accommodations such as NHS hospitals, domestic abuse accommodations, children’s homes, temporary accommodations for homeless individuals, and armed forces accommodations.

How will the levy be calculated?

The levy is calculated based on the gross internal area (GIA) of chargeable residential floorspace, including communal spaces directly serving chargeable dwellings. Communal spaces exclusively serving exempt accommodations are not chargeable. Mixed-use communal areas must be proportionately allocated between chargeable and exempt uses.

A discounted rate, set at 50%, applies to previously developed land (PDL). To qualify, at least 75% of the land within the planning permission boundary must meet the government’s definition of previously developed land.

Payment and compliance

Developers can pay the levy at any time after receiving the levy liability notice, but must fully settle the levy before submitting the compliance declaration and before a final completion certificate can be issued. Upon full payment, a levy payment certificate will be issued within two weeks by the collecting authority.

Detailed levy information and supporting evidence must be submitted at both Initial Notice and commencement notice stages. Any inaccuracies or incomplete submissions could result in delays, emphasising the necessity of accurate compliance from the outset.

Preparing for implementation

With the levy launching in October 2026, developers should now:

• Familiarise themselves with specific levy rates for their local authority areas
• Review projects for eligibility for discounted rates
• Integrate levy calculations into project budgets early
• Ensure robust internal processes to manage levy documentation and payments efficiently

Summary of roles and responsibilities

Residential Developers: Must accurately submit levy information and supporting documentation at the Initial Notice and commencement stages, including evidence for exemptions or discounted rates. Timely levy payments are essential to prevent delays in obtaining final completion certificates.

Local Authorities: Serve as collecting authorities responsible for verifying levy submissions, issuing levy liability or no-charge notices, and ensuring payment compliance before releasing final completion certificates.

Registered Building Control Approvers (RBCAs): Required to submit complete levy information at both Initial and Commencement Notices. RBCAs ensure developers correctly confirm levy payments or exemptions prior to issuing final certificates and maintain clear communications with local authorities to prevent administrative delays.

How Harwood can help

As Registered Building Control Approvers, Harwood is committed to supporting our clients through this complex regulatory landscape. Our experienced team will ensure all required levy details are accurately submitted with Initial Notices to avoid delays or rejection by local authorities.

Ben Cheeseman adds:

“These draft regulations underline the importance of accountability within the industry and will undoubtedly lead to improved safety standards. Harwood Building Control is fully equipped to guide developers smoothly through the levy compliance process. We encourage all our clients to engage with us early to ensure preparedness and compliance.”

Harwood will continue to keep clients informed as the regulations progress through Parliament and as further details emerge.

Should you have any questions about the Building Safety Levy and its impact on your projects, please contact our teams at Canterbury (01227 931 777), Milton Keynes (01908 012 6669), Sheffield (0114 321 8999), or via email at enquiries@harwood.uk.com.

The Ministry of Housing, Communities and Local Government (MHCLG) has published guidance that explains the operation of the Building Safety Levy – you can find that here: Building Safety Levy: Guidance