Building Safety Levy implementation: Key changes and details announced

A recent meeting with the Ministry of Housing, Communities, and Local Government (MHCLG) confirmed significant updates regarding implementing the Building Safety Levy (BSL).

Initially announced in February 2021, this long-awaited measure aims to ensure that developers contribute to the remediation of building safety defects, including replacing unsafe cladding. Below, we explore the confirmed changes and key details surrounding the levy, which is expected to raise £3 billion over the next decade.

Why the Building Safety Levy is happening

The Building Safety Levy is a critical component of the government’s efforts to protect taxpayers and leaseholders from bearing the financial burden of addressing historical building safety defects. By requiring developers to contribute, the levy ensures greater accountability within the construction industry.

The implementation – what we know so far

Below, we break down the key aspects of the BSL, including its timeline, applicability, exemptions, calculation methods, and developer responsibilities under the new framework.

When to expect the changes

The legislation will be published around March/April 2025 and enacted by September 2025. These changes are set to affect many developers, so this initial outline gives those affected time to prepare.

Who does the levy apply to?

The levy will cover all residential buildings requiring building control approval, regardless of height, making it a broad-reaching measure for the sector. The BSL will apply to projects meeting the following criteria:

· Residential Sites – Applicable to projects with 10 or more plots or bed units.

· Student Housing and HMOs – Applies to developments with 30 or more bed units.

The exemptions

Following consultation, the following types of housing will be exempt:

· Social and affordable housing

· Developments of fewer than ten units

· Care homes, NHS hospitals, armed forces accommodation, etc.

· Supported housing, children’s homes, refuges etc.

· For-profit housing built by a not-for-profit registered provider

How will the levy be calculated?

· The levy will be based on the number of units on the planning application, not the number of units on the Building Regulation submission. This approach will stop developers from exploiting loopholes in the new system by submitting 10 x applications of 9 plots, for example.

· The levy will be based on floor space (m2). The cost/m2 is unknown at this stage and is expected to vary for each local authority. To encourage redevelopment, brownfield sites will qualify for discounted rates.

Responsibilities under the BSL

To comply with the BSL, the following steps will need to be adhered to:

· The developer will need to inform the LA when they reach the new definition of commencement on the first plot. This will trigger the calculation of the levy for the whole site.

· The full levy amount will be due upon completion of the first plot or bed unit.

· If the development changes from the planning permission, e.g. number of plots, number of exempt plots/units, floor area etc… a Levy update notice will need to be submitted to the LA and a new levy calculated.

Additional noteworthy points include:

· The new Initial Notice (IN) form must include a statement confirming that the levy applies, along with the number of plots or bed units. Additionally, it must include the Planning Reference Number.

· Building Control Bodies will need confirmation from the LA that the levy has been paid in full prior to issuing the Final Certificate. The LA will have 10 days to provide this response. No confirmation, no Final Certificate.

· The LA will collect the levy for which they will receive a fee (a proportion of the levy).

Assisting clients through the process

The Building Safety Levy represents a significant step in improving building safety standards and ensuring equitable funding for necessary remediation works. This announcement clarifies the path forward for developers, local authorities, and the construction industry.

We are committed to guiding our clients through the complexities of the Building Safety Levy process. As Registered Building Control Approvers (RBCAs), we will ensure that all required levy details are accurately submitted with Initial Notices to local authorities. This minimises the risk of rejection due to missing information.

Ben Cheeseman, Director at Harwood Building Control, adds:

“The Building Safety Levy represents a vital step in ensuring accountability across the construction industry. This levy will help fund critical remediation work and drive higher standards and greater responsibility in future developments.”

“If any of our clients would like further clarification on these changes and how we will support them through the process, our team is happy to assist.”

Harwood will continue to provide updates as more information becomes available. If you’d like to speak to a member of our team about these changes or how they might impact your work, please contact us at 01227 931 777 (Canterbury), 01908 012 6669 (Milton Keynes) or email enquiries@harwood.uk.com.