Scottish Building Safety Levy: consultation

Annex A

UK Government Proposals for a Building Safety Levy in England

The Building Safety Act 2022 gave powers to the UK Government to introduce a BSL on new residential buildings requiring certain building control approvals in England, to raise revenue to be spent on building safety.

Following the introduction of the 2022 Act, the previous UK Government Department for Levelling Up, Housing and Communities (DLUHC) (now the Ministry of Housing, Communities and Local Government) published three public consultations on the England only Building Safety Levy (UK Levy)– the first in July 2021, the second in November 2022 and the third (a technical consultation) in January 2024. No formal Government response to the first consultation was published. A response to the second consultation was published in January 2024.

Overview of UK Levy proposals from the consultations:

• It is intended that the Levy will be collected by local authorities.
• Levy rates will vary by local authority boundaries in England to take account of different house values.
• It is proposed there will be a differential levy rate for new build on “brownfield land”.
• There are a number of proposed exemptions to the levy including affordable housing.
• It is proposed the levy will be charged on floorspace of developments rather than per unit.
• The UK Government also proposed to exclude small developments (under 10 units) as a means of protecting small businesses.
• There is no intention to charge the levy on owner/occupiers who wish to improve their property.

Note that while the UK Levy proposal provides an illustrative basis upon which a Scottish tax could be established, the creation of a separate tax in Scotland provides an opportunity to consider how the tax could be aligned with Scottish Government priorities and objectives, as well as the Scottish housing sector and economy.