The Levy has been introduced under the Building Safety Act 2022 and is implemented through the Building Safety Levy (England) Regulations 2025.
Its purpose is to ensure that the residential development sector contributes towards the cost of remediating historical building safety defects following the Grenfell Tower tragedy.
For developers, the Levy represents another important factor to consider when assessing the commercial viability and delivery of residential schemes.
Which developments will be affected?
The Levy will apply to most new residential developments in England that require building control approval. It will generally be payable on developments creating new dwellings, although the scope of the legislation should be carefully considered for each project.
How is the Levy calculated?
The Levy is charged on a per square metre basis, with rates varying depending on the location of the development. Local authority areas have been placed into different charging bands to reflect differences in residential land values across England.
Are any developments exempt?
Yes. The Regulations provide a number of exemptions from the Levy. Most notably, affordable housing meeting the prescribed statutory requirements will be exempt. Certain developments by registered providers, community-led housing and smaller developments may also benefit from exemptions or reduced liability, depending on the circumstances.
When is the Levy payable?
Unlike many other development costs, the Levy is linked directly to the building control planning process. It must be paid before a completion certificate can be issued by the relevant building control authority.
What should developers do now?
Early legal advice can assist in identifying if the Levy applies, whether any exemptions are available and how the additional cost should be reflected in development appraisals, contracts and transaction documentation.
If you wish to discuss this further, please do not hesitate to contact Anna Dunn by email: ald@cooperburnett.com or tel: 01892 515022
This blog is not intended as legal advice that can be relied upon
Originally published in Crowborough News: https://crowborough.news/
