Government consults on design and implementation of Building Safety Levy
The Government has launched a consultation on the design and implementation of the Building Safety Levy that will be charged on new residential buildings requiring building control approval in England.
The Department for Levelling Up, Communities and Housing has estimated that the levy could raise £3bn over 10 years towards fixing unsafe buildings.
Under the proposals drawn up by DLUHC, developers of residential buildings, regardless of their height, will have to pay the levy contribution as part of the building control process.
“This will mean that unless the levy is paid, a developer could not move on to the next stage of the building process, which could lead to project delays and impact future revenues,” the Department said.
The consultation covers the following areas:
- Overview and update
- Exclusions
- Supportive measures
- Impact on industry
- Sanctions and incentives
- Appeals
The proposals include an option to alter levy rates depending on where in the country the building is, with lower rates in areas where land and house prices are less expensive.
The consultation suggests that local authorities will be best placed to act as the collection agents “as they have the necessary systems, data, knowledge, and relationships in place with the developer sector”.
It is proposed that affordable homes be exempt from a levy charge. A number of community buildings, including NHS facilities, children’s homes and refuges, including those for victims of domestic abuse, will also be exempt.
DLUHC said the levy would be reviewed regularly so that it can be adjusted to take account of changing circumstances, such as wider economic conditions. There are also plans to protect small and medium sized enterprises by excluding smaller projects.
The consultation, which can be viewed here, closes on 7 February 2023.
Minister for Local Government and Building Safety Lee Rowley said: “We have been clear that developers must pay to fix building safety issues and the Building Safety Levy is an important part of making that a reality.
“Today’s consultation will give industry and local authorities an opportunity to work with us going forward.
“By having these plans in place, we can ensure that all leaseholders are protected, regardless of whether their developer has pledged to remediate or not.”
The Building Safety Levy will run alongside the developer pledges which were announced earlier this year. Under the pledges, 49 of the UK’s biggest homebuilders have committed to fix life-critical fire-safety defects in buildings over 11 metres where they had a role in developing those buildings in the last 30 years. This amounts to a commitment of at least £2 billion, DLUHC said.
