Building Safety Levy update August 2025 – Developers, take note!

Our Article here was published as an introduction to the Building Safety Levy (BSL), following the consultation response that the Government had recently published.

In the relatively short time since that consultation response, the Government has now published guidance on the BSL and laid out draft regulations called ‘The Building Safety Levy (England) Regulations 2025 (the Draft Regulations).’

Links:

https://www.legislation.gov.uk/ukdsi/2025/9780348273779, https://www.gov.uk/guidance/building-safety-levy-guidance

We summarise some of the key points developers should be aware of below:

What is the BSL?

The Government describe the BSL as a tax on new residential buildings, to be collected by local authorities, as local guardians of the building control process who have tax collection expertise. The income raised from the BSL will contribute to fixing building safety defects across England, ensuring residents are safe.

When will the Levy come into force?

The draft regulations say that the BSL will come into force on 1 October 2026. However, they will not apply to any building control application made before this.

What should developers do?

Prudent developers working on developments that may be affected by the BSL will need to factor this potential cost into their development budgets.

What type of development will the BSL be charged on? – The BSL charging conditions

If a developer is submitting an application for building control approval relating to the provision of one or more dwellings or one or more bedspaces of purpose-built student accommodation (also known as PBSA), the BSL is applicable and the developer will need to consider whether the works meet all three of the BSL charging conditions and will therefore incur a BSL charge.

The three charging conditions are:

• The works must constitute, or form part of, a major residential development. For the purposes of the BSL, a major residential development is a development of 10 new dwellings or more, or 30 new bedspaces or more, if the development is PBSA. This will be determined by the planning permission for the development and the number of dwellings/ bedspaces permitted by that permission.

Note that the BSL cannot be avoided by submitting multiple applications for building control approval for fewer than 10 dwellings or 30 bedspaces if the planning permission to which those applications or notices relate is for more than 10 dwellings or 30 bedspaces.

• The works must result in the creation of new residential floorspace. This could include (but is not necessarily limited to):
• A new building being constructed which contains residential floorspace
• An existing building which has no residential floorspace undergoing a change of use or conversion to create residential floorspace (e.g. conversion of an office block into a block of flats): and
• An existing building which has some residential floorspace having additional floorspace created, either through extension or conversion/change of use (e.g. new storeys are being added to a block of flats).

There are exemptions for social housing, supported housing and other exempt uses.

• The developer is not an ‘exempt person’ as defined in the draft regulations. If the developer is a non-profit registered provider of social housing (or a wholly owned subsidiary company), all of their works are exempt from the BSL charge (as such providers reinvest profits from housing sold or rented on the open market back into their social housing provision).

Information and evidence requirements

The developer will need to provide detailed information when making a building control application. This is so even if they consider the works do not meet the BSL charging conditions as evidence will be need to be provided to verify this.

The list of required information is comprehensive and includes information on: planning, anticipated floorspace and confirmation of whether the land has been previously developed.

Certification is required that all the information submitted is true and accurate and “spot checks” may be carried out on it.

Once they have all the information and evidence they need it’s for the Local Authority to decide if the BSL is payable.

Levy rates

The amount of BSL payable will depend on the building’s size and location.

The Government has set the BSL rates for each local authority area in legislation. The rates have been weighted using average house prices in local authority areas, so that areas with the highest average house prices have the highest levy rates, and those with the lowest average house prices have the lowest levy rates.

The BSL rate is charged per square metre of “chargeable floorspace” in a “chargeable development” (as defined in the draft regulations).

In addition, the Government has set levy rates for each local authority for development being constructed on previously developed land, sometimes known as brownfield land. This is half that of the standard levy rate, recognising that the costs of building on this type of land are often higher.

How will BSL payment work?

The collecting authority will generally issue a levy liability notice or notice of no charge within 5 weeks.

The BSL will be payable before completion of the building work or occupation of the building (whichever is earlier).

Once paid the collecting authority will issue evidence of payment which must be present before a completion certificate or final certificate is issued. Therefore, payment of the BSL will form an integral part of the process.

What is the process for BSL payments?

Want to further understand the process? The Government has published “process maps” to provide information on how levy payments and information should work across the various levy collection routes.

https://www.gov.uk/guidance/building-safety-levy-guidance/annex-a-process-maps

What now for the BSL?

• The draft regulations need to be considered by parliament and they will decide if any amendments are require to them
• Amendments may also need to be made to other regulations to bring them in line with the draft regulations once they are finalised.
• It is hoped that the implementation of the BSL will not lead to further delays like we have seen with the Building Safety Act gateways. To see our article on this please click here.
• In the short term we may see a rush on building control applications to try and avoid the BSL.

Keep an eye out for our continuing updates on the introduction of the BSL, and other key developments in relation to the BSA. In the meantime, if you have any questions, our expert team would be happy to help.