Government consults (again!) on Buildings Safety Levy

The government has launched a second consultation on its proposed Building Safety Levy for England under the Building Safety Act 2022 (BSA 2022).

Under the new proposals, the levy will apply to developers of residential buildings (regardless of a building’s height) and will be paid as part of the building control process. The consultation suggests that:

• The levy will be collected by local authorities and levy rates may vary across different geographical areas depending on local house prices or whether the development is on a greenfield or brownfield site. The method for calculating levy rates is yet to be decided.
• Various buildings will be exempt from the levy, including affordable homes, NHS facilities and care homes, as well as small developments of less than ten units. The government has not yet determined an approach for the build to rent, purpose-built student accommodation and older people’s housing sectors.
• Payment must be made in two stages. 60% will be payable before work commences (at gateway two of the BSA 2022’s gateway regime) and 40% before the final certification stage (gateway three). This two-stage process allows for recalculation of the amount payable if the project changes during construction. If payment is not made, the local authority may issue a “stop notice” or refuse final certification. Beyond this, the consultation suggests additional sanctions, including punitive fines in various situations.

The consultation closes on 7 February 2023. While the consultation document does not indicate when the levy will come into force, that is widely expected to occur at some point in 2023.

The Building Safety Levy was first mooted in February 2021, before being included in the BSA 2022 when it was introduced to Parliament in July 2021. It has already been the subject of a government consultation that ended in October 2021, when it was intended to apply only to higher-risk buildings.

The levy will operate separately, but alongside, the government’s UK-wide residential property developer tax (RPDT). The government hopes that the levy will raise £3 billion over ten years.

View the consultation here