Propertymark has consistently highlighted the need for fairness and proportionality throughout the development of the Building Safety Levy policy. In our responses to the Levy design consultation in 2023 and the technical consultation in 2024, we emphasised the importance of ensuring transparent and fair methodologies for levy calculation and collection processes.
Exemptions for social homes and small developments
We specifically called for SME developers to be given support to ensure they are not disproportionately affected and highlighted that the Levy must not negatively impact housing supply by inadvertently creating barriers to smaller housing developments.
The UK Government has responded by creating an exemption from the Levy for sites fewer than 10 dwellings (or fewer than 30 bedspaces for Purpose Built Student Accommodation), which is designed to protect housing delivery by smaller housebuilders.
Social housing developments and accommodation which has a wider social or community benefit – such as hospitals, hotels, care homes and school accommodation – will also be exempt.
How will the Levy work?
Local authorities with building control responsibilities will act as the collection authorities. They will receive UK Government funding to cover their preparation costs before the Levy is operational. The collected revenue will be passed back to the central government to address building safety concerns.
See UK Government guidance on the Building Safety Levy →
The levy will be calculated based on a specified area rate for each square metre of residential floorspace, rather than per house – an approach championed by Propertymark to avoid incentivising builders to deliver fewer units.
The rates have been calculated using data on average house prices in each local authority area, so the levy is proportionate to the returns for the developer and does not discourage building in certain areas. The Levy is halved for developments on previously developed (brownfield) land, reflecting the higher cost of building on these sites.
If developers fail to pay the levy, the local authority, Registered Building Control Approver, or the Building Safety Regulator will withhold the building control completion certificates for the site.
