Developers need to understand not only what the levy may cost, but when information must be supplied and how late payment could affect occupation, completion and cash flow.
By Stuart Power, Director and Joint CEO, Salus
From 1 October 2026, England’s new Building Safety Levy will add a further cost and compliance step to many residential schemes. Its policy purpose is clear: the government estimates that it will raise £3.4 billion over around ten years towards the remediation of historic building safety defects.
For development teams, however, the immediate issue is practical. The levy has to be considered in land appraisal, design information, project cash flow and the route to occupation and certification. It should not be left as an administrative task for the end of the build.
The levy applies to relevant applications for building control approval and initial notices submitted on or after 1 October 2026. Applications made before that date are outside the regime, even if they are subsequently varied. However, a rejected pre-October application that is resubmitted on or after the start date can become liable.
That makes the quality and timing of submissions particularly important as the implementation date approaches.
Who is within scope?
The charging conditions focus on major residential development: schemes creating at least 10 new dwellings, or at least 30 new bedspaces in purpose-built student accommodation (PBSA). The regime can also apply where new residential floorspace is created through an extension or change of use.
There is an important distinction between liability and information requirements. An application involving even one new dwelling or one PBSA bedspace may need to carry prescribed levy information, although a scheme below the major-development thresholds should receive a notice of no charge if the relevant conditions are met.
Treating every smaller residential application as paperwork-free could therefore create an avoidable rejection risk.
Exclusions and exemptions also need to be evidenced rather than assumed. The regulations exclude specified uses including hospitals, care homes and hospices, children’s homes, hotels and hostels, school accommodation, secure residential accommodation, accommodation for victims of domestic abuse and certain temporary accommodation.
Social and supported housing have their own exemption provisions and evidence requirements. Mixed-tenure schemes require particular care because exempt floorspace, and the appropriate proportion of shared communal space, must be separated from chargeable area.
The cost is local, and the measurement matters
The levy is calculated by multiplying chargeable residential floorspace by the rate set for the local authority area. Rates are weighted by local house prices, so the same amount of floorspace can attract a materially different charge in different parts of England. Qualifying previously developed land receives a 50% rate reduction.
Chargeable floorspace is based on gross internal area. Communal areas used for the benefit of residents are generally included, subject to apportionment where they serve both chargeable and exempt accommodation.
Developers should therefore make sure the figure used for the levy can be reconciled with current plans, tenure schedules and supporting evidence. A broad area estimate used at appraisal stage is not a substitute for a controlled calculation at commencement.
In our view, the commercial lesson is straightforward: the levy belongs in the viability model from the outset. The headline rate is only one part of the exposure. Teams also need to test the land classification, the treatment of mixed uses and tenures, and the effect of later design changes on chargeable floorspace.
A separate process, whichever building control route is chosen
The levy is separate from normal building control fees. It is administered by the local authority in which the development is situated, including where a Registered Building Control Approver is delivering the building control service or the Building Safety Regulator is the building control authority for a higher-risk building.
Some information is required with the application or initial notice, including the planning reference and proposed number of dwellings or PBSA bedspaces. Further information and evidence are supplied at the first commencement notice stage. This includes any claimed exemption, whether the site qualifies as previously developed land and the gross internal area of chargeable floorspace.
For local authority and Registered Building Control Approver routes, government guidance says the collecting authority should normally issue its levy liability notice or notice of no charge within five weeks of receiving the commencement-stage information. This increases to eight weeks where a spot check is carried out.
For applications submitted through the Building Safety Regulator, the guidance allows seven weeks from submission, or ten weeks where a spot check is carried out. These periods can also be extended where further information is required or an extension is agreed.
These timescales should be built into the programme rather than treated as instant administrative confirmation.
Why completion planning matters
Once the liability notice is issued, the developer has some flexibility over payment timing, but not indefinitely. The levy must be paid before completion of the work or occupation, whichever comes first.
Where certification is sought, the whole levy liability attached to the relevant application or notice must be paid before any completion certificate can be issued or any final certificate accepted. This also applies where a certificate relates to only part of the works.
This is more than a technical sanction. A delay to certification can affect handover, occupation, sales, lending and project cash flow. It also means that phasing strategy needs attention: obtaining a partial certificate does not allow the levy associated with the wider application or notice to remain partly unpaid.
Changes during construction must also be captured. An amendment notice, further application or change control application may require updated levy information where floorspace, tenure, exemption status or another relevant factor changes. An updated liability notice can create a further payment or, where liability falls, a refund.
Five actions for development teams now
- Identify applications and initial notices likely to be submitted on or after 1 October 2026. Do not rely on an unrealistic pre-deadline submission.
- Include a location-specific levy allowance in land and viability appraisals, with previously developed land status tested against the regulatory definition.
- Establish ownership of levy data across the client, planning, design, cost and building control teams.
- Create an auditable gross internal area calculation that distinguishes chargeable, exempt and shared communal floorspace.
- Link levy reviews and payment authorisation to design change control, phasing, occupation and certification milestones.
The Building Safety Levy is intended to fund a national remediation priority, but it will be administered through individual projects and local authority processes.
The teams that manage it best will be those that treat it as an early commercial and information-management issue. Waiting until final certification to establish the charge, assemble the evidence or arrange payment is precisely where a tax obligation risks becoming a project delay.
About the author
Stuart Power is Director and Joint CEO of Salus, an independent Registered Building Control Approver and building compliance consultancy.
Building Safety Levy webinar
Salus will hold an introductory Building Safety Levy webinar on 22 September 2026. Registration details will be published at salusai.co.uk.
References
- Ministry of Housing, Communities and Local Government: Building Safety Levy guidance, Section 1 – Introduction
- Ministry of Housing, Communities and Local Government: Building Safety Levy guidance, Section 3 – Advice for developers of residential buildings
- The Building Safety Levy (England) Regulations 2025 (SI 2025/1236)
- Draft Building Safety Levy (Amendment) (England) Regulations 2026
- Building Safety Levy technical consultation response
- Building Safety Levy guidance: Annex C – methodology note
This article reflects government guidance available on 26 August 2026. The Building Safety Levy (Amendment) (England) Regulations 2026 remained in draft at that date.