Building safety levy rate set at up to £10,000 a home in London

Levy introduction delayed a year to Autumn 2026 – list of new rates  

Developers will be forced to pay up to £10,000 a unit for new homes they build in upmarket London Boroughs like Chelsea.

The Government has announced the new Building Safety Levy rates it intends to charge as a tax on new homes and student accommodation projects across the country.

As a small reprieve, ministers have put back the planned introduction from Autumn this year to Autumn 2026, giving the house building industry more time to adapt.

Rates will vary across local authorities in England and be charged on a sq m basis rather than the unit basis the industry called for during consultation. Schemes on brownfield land will receive a 50% levy discount.

In Kensington and Chelsea, this means building a 100 sq m home on a previously undeveloped plot would cost around £10,000 a unit, while in County Durham, the rate for the same-sized property would be £1,270.

On brownfield land, the new build tax would be lower at around £5,000 a unit in the west London Borough, while in the north east of England it would fall to £635.

The government said that over time it expected the cost of the levy would be reflected in the price that developers pay for land and therefore not be passed on to home buyers.

New levy charges are another blow to house builders who warn it will dampen output and present another barrier to schemes going forward.

Developers say that under-resourced planning departments are now taking almost double the time to get through planning. In cities like London they also complain that registered landlord demand for section 106 affordable homes has all but dried up.

The new Building Safety Act gateway process has also imposed a significant lag on high-rise schemes gaining approval to proceed to construction.

Industry calls to exclude independent retirement schemes, built-to-rent and purpose-built student accommodation and developments greater than 9 units but fewer than 50 have been rejected.

Under the Building Safety Act the duty to pay the levy falls on the client defined as a company or person for whom a construction project is carried, but may also be the principal designer and/or principal contractor.

If the client changes with levy payments outstanding, then the new client would take on responsibility for these payments.

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