What is the Building Safety Levy?

The Building Safety Levy (BSL) is a new charge on qualifying residential development in England, introduced as part of the Government’s post-Grenfell building safety reforms. Its purpose is to ensure that the residential development sector contributes to the cost of remediating unsafe residential buildings, particularly those affected by cladding and other fire safety defects.

The levy comes into force on 1 October 2026 and is expected to raise approximately £3.4 billion over a ten-year period. It is payable by developers and operates through the building control process rather than the planning system.

When the Levy applies

The BSL generally applies to major residential developments that create 10 or more dwellings or 30 or more student bedspaces, provided there is a net increase in residential floorspace. This includes many new-build developments, conversions and extensions.

The levy is calculated by reference to the development’s gross internal floor area, using a rate per square metre set by the relevant local authority. Rates will vary across England to reflect local housing market conditions. A reduced rate applies to qualifying brownfield developments, typically around 50% of the standard greenfield rate.

Local authorities are responsible for administering and collecting the levy. Developers will receive a Levy Liability Notice setting out the amount payable, with payment generally due before completion or occupation of the development.

Exemption for almshouses

The Building Safety Levy Regulations provide full or partial exemptions for certain categories of development where broader social policy considerations apply. These include affordable housing, certain supported and social housing, care homes, hospices, hotels, temporary accommodation and almshouses.

Almshouse developments are expressly exempt from the Building Safety Levy. Where a development falls within the relevant definition of an almshouse, no levy is payable and no levy calculation should be required at the building control stage.

The exemption recognises the distinctive nature of almshouses as charitable, not-for-profit housing provided to relieve financial hardship and offer secure, community-based accommodation for those in need. Subjecting such developments to the levy could adversely affect their financial viability and reduce the delivery of this important form of charitable housing.

For almshouse charities and their development partners, the exemption reduces development costs, removes a potential administrative burden and supports the continued provision of small-scale, community-based housing for beneficiaries.

Conclusion

The Building Safety Levy represents a significant new mechanism for funding the remediation of unsafe residential buildings. However, the express exemption for almshouses reflects their charitable purpose and social value, ensuring that the levy does not impede the delivery of this important form of affordable housing.

posted 30 June 2026