Among several key forthcoming developments in commercial property is the Building Safety Levy, applicable to new building control applications from October this year. Property developers need to start factoring in the new charge now if they haven’t already done so.
The levy (set out in The Building Safety Levy (England) Regulations 2025) is a new mandatory charge on major residential developments that are within scope. The cash will be earmarked to fund the cost of fixing defective buildings across England.
Importantly, the regulations make the building and construction industry - not the tax-payer - responsible for required safety works. Increasing resident safety should be a sufficient prompt for developers to get to grips with the requirement.
If you’re unsure whether a proposed development may fall within scope, do consider taking specialist advice. The commercial property team at mfg Solicitors are experienced in new residential and commercial developments and can advise developers on the new legislation.
What’s the background?
Since the 2017 Grenfell Tower fire tragedy, the issue of dangerous cladding has remained at the forefront of discussions and policy-decision making around large residential developments. It culminated in the Building Safety Act 2022 (England); then last November, 2025 Regulations were passed. Accompanying guidance has also been published.
What is the new levy?
The levy will apply to certain building control applications and initial notices submitted from 1 October 2026, though in some cases it may also apply to applications before that date. It will apply to residential developments creating at least 10 dwellings; and to other large residential developments, including those providing at least 30 bed spaces in purpose-built student accommodation (PBSA).
It will not apply to supported housing, affordable housing or housing built by non-profit registered providers.
For chargeable developments, the levy will be charged on:
- Building control full plans applications
- Initial notices
- Certain higher risk buildings (HRB) applications (ie tall residential buildings)
How much is the levy?
Individual local authorities set the levy and will collect it on completion of the works, or occupation (whichever is the earlier). And until the levy is paid, the completion certificate will not be given.
The levy itself is charged per square metre of chargeable residential floorspace at two rates: one for previously developed land (brownfield sites) and one for non-developed land. For example, the current rates in Worcester and surrounding regions are listed as:
- Worcester - £14.87 per m² (previously developed land); £29.74 per m² (non-previously developed land)
- Shropshire – £12.34 per m²; £24.68 per m²
- Birmingham - £14.62 per m²; £29.23 per m²
What does this mean?
Developers must not overlook the upcoming levy and ought to be factoring the cost into their pricing, bids and contractual terms.
They can challenge the levy, but the local authority must be asked to review it within a 28-day window. If unsuccessful, a further appeal can be made to the First Tier Tribunal.
As this is a new charge under new legislation and regulations, it is important to consider taking expert legal advice on how it will impact your residential developments.
How can we help
Get in touch with the experienced commercial property team at mfg Solicitors for specialist advice. Please call Phil Hutsby-Hunt on 0121 236 7388 or email phil.hutsby-hunt@mfgsolicitors.com