Building Safety Levy - comes into effect in England

There has seemingly been an uptick in planning applications ahead of today's introduction of the Building Safety Levy (BSL). 

It will apply on all new applications (submitted to Local Planning Authorities in England) received today onwards for projects involving TEN or more housing units, or Purpose Built Student Accommodation (PBSA) of 30 bedspaces or more.

The rate of charge for this levy is fixed by the relevant planning authority as a cost per metre squared of applicable building area, measured by Gross Internal Area (GIA)  - similar to CIL.

The published 'full' rate is reduced by 50% if the scheme is on previously developed land (PDL) or brownfield sites.  At least 75% of the land within the redline boundary of the development (as specified by the planning permission) in which the works are being constructed must meet the definition of PDL for the discounted rate to be applied.

As with CIL, developers in Royal Borough of Kensington and Chelsea will face the country’s highest (full) BSL rate at £100.35m²; whilst the lowest rate of £12.70m² is in County Durham.  The full list of rates is within Schedule 3 of the Regulations.

There are also exemptions that mean certain owners/developers are exempt from BSL, if they meet the legislative criteria.

The BSL is introduced under the Building Safety Act 2022 and implemented through the Building Safety Levy (England) Regulations 2025 and allows certain exemptions from the charge.

Exempt development (as Schedule 1 of the Regulations), other than those projects below the thresholds, include non-profit registered provider of social housing, care homes, secure residential institution or other premises for the supervision and rehabilitation of persons charged with or convicted of offences, hospitals, accommodation for victims of domestic abuse, children’s homes, residential family centres or supported accommodation for children; hotels or hostels, a monastery, nunnery, seminary or similar establishment, almshouses, or temporary accommodation for homeless people. 

All exemptions require suitable evidence to be submitted to LPA so as to verify the project circumstances and relief from BSL.

The BSL is to be enforced through the Building Control process.  No completion certificate can be issued until the levy has been settled in full and the LPA issued a Levy Payment Certificate.

So unlike CIL, the BSL potentially hits the project cashflow later within the build period.  The developer (or their project team) must however, ensure they have included these costs into the project budget and cashflows.

A key risk is for revised planning schemes that originally lie outside the BSL criteria (<10 dwellings; or 30bed PBSA) but then get amended such that the revised scheme exceeds these thresholds - so fair warning to all developers and their respective advisers involved in squeezing more out of existing permissions from today onwards! 

LPAs may undertake random spot checks to validate the accuracy of the building safety levy information which the client has provided.  As part of a spot check, the collecting LPA should review:

• Supporting evidence provided by the client to accompany the levy information, which may include floorplans, photographs of the site, S106 agreements, signed agreements with registered providers of social housing,

• The planning permission for the works contained in the application for building control approval,

• Any other evidence that is reasonably available to the collecting authority.

The Government expect that as part of a spot check, the collecting authority may:

• Measure floorplans submitted by the client, and/or agreed as part of the planning permission, to check the accuracy of floorspace information submitted,

• Check site plans, photographs and any other evidence (including any information provided regarding development pursuant to Permitted Development) to assess whether or not the site qualifies for the lower rate for previously developed sites,

• Check the accuracy of the client’s application of exemptions (such as the social housing exemption) by checking social housing conditions outlined in the planning permission or s106 agreement,

• Check whether the works are, or form part of, a major residential development, that is, a development for which there is planning permission for 10 or more dwellings or 30 or more bedspaces (if PBSA), by checking the planning permission.

The Govt suggest that collecting authority is not expected to carry out a site visit in order to complete a levy spot check.  However, our CIL experience suggests that they may well undertake 'drive past' inspections - as LPAs have certainly provided photographs that show they have been out to view projects for themselves. 

If you would like to discuss any property tax matters or specific queries relating to the above information, then please do contact the team on 0345 230 6450 or [email protected]. We look forward to speaking with you soon.