Building safety levy delayed until autumn next year

The government has said that the introduction of the £3.4bn building safety levy has been pushed back by a year.

In a note accompanying the response to a consultation on the proposals, the Ministry of Housing, Communities and Local Government (MHCLG) said: “As part of the Remediation Acceleration Plan published in December 2024, the government announced its intention to launch the levy in autumn 2025.

“We have now determined that the levy will come into effect in autumn 2026, with the levy regulations to be laid in Parliament later this year.”

Explaining the delay, it added: “This will give all local government, the Building Safety Regulator, Registered Building Control approvers around 18 months to prepare for the levy; and housing developers who will pay the levy around 18 months to factor levy cost into their financial planning.”

Last week, the Home Builders Federation wrote to chancellor Rachel Reeves to call for the £3.4bn levy on new housing developments to be reconsidered.

The letter, which signed by more than 100 housebuilders, said the levy “has raised significant concerns from all areas of the new build sector”.

It said: “This additional burden will result in many fewer homes, including affordable homes, being built and likely threaten the existence of some hard-pressed SME home builders.”

The levy was originally proposed by previous housing secretary Michael Gove and will see developers pay a fee on new housing developments which require building control approval and is expected to raise £3.4bn over 10 years.

The MHCLG said building safety was a “top priority” for the government and added: “The building safety levy is one of the measures we are implementing to ensure that the industry responsible makes a fair contribution to fix building safety issues.”

The document, published this morning, also discloses the levy rates for dozens of local authorities in England.

Ian Fletcher, director of policy for real estate at the British Property Federation, welcomed the news the levy was being delayed by a year. “Those bodies responsible for administering and collecting the levy also need to be ready and given the issues with both the Building Safety Regulator and with local government re-organisation underway in many areas, it is sensible to delay.”

But he added: “This levy is going to hugely challenge the viability of various forms of house building in places that need it most and the proposed brownfield rates in low house price areas will have little impact. It would have been far better and simpler to have based the levy rates on CIL rates, plus created an exemption for developers of rental accommodation who have no call on the building safety funds, for which it is meant to be recovering the costs of.”

The planned levy rates

Source: MHCLG