Home builders call for suspension of the Building Safety Levy

1 What is the Building Safety Levy?
2 Housebuilders write to the Chancellor
3 Related articles on Designing Buildings
4 External links

[edit] What is the Building Safety Levy?

The Building Safety Bill 2019-20 was announced in the Queen’s Speech on 19 December 2019 following the Grenfell Tower fire on 14 June 2017. Its purpose was to put in place new and enhanced regulatory regimes for building safety and construction products, and to ensure residents have a stronger voice in the system. Part of the Bill (Clause 57) gave the Secretary of State powers to impose a new Building Safety Levy in England. The Bill was granted Royal Assent on 28 April 2022 and became the Building Safety Act 2022.

The powers to create the new Building Safety Levy were conferred by Section 58 of the Building Safety Act 2022 (in a new section 105C of the Building Act 1984). The details of the levy to be set out in secondary legislation that follows. The levy is intended to contribute towards the government’s costs for remediating historical building safety defects, to be applied to developers, when making an application to the Building Safety Regulator for building control approval, via a “Gateway two” process. It is in addition to a new Residential Property Developer Tax (RPDT). This will tax the profits of larger developers to contribute towards fixing historical fire safety defects, including unsafe cladding.

There are a number of exemptions to the Building Safety Levy which is primarily focussed on private housing development, the exemptions include:

Social and affordable housing.
Developments of fewer than ten units.
Care homes, NHS hospitals, armed forces accommodation, etc.
Supported housing, children's homes, refuges, etc.
For-profit housing built by a not-for-profit registered provider.

[edit] Housebuilders write to the Chancellor

The Home Builders Federation (HBF) writes that it has written to the Chancellor of the Exchequer to highlight concerns over the impact of the proposed Building Safety Levy on housing delivery and to request that the Government reassess its approach. In the letter, signed by more than 100 home builders, HBF expresses its deep concerns about the forthcoming levy, which is due to be implemented later this year.

"Importantly, it highlights how the new tax, expected to raise £3.4 billion, is likely to severely hamper efforts to meet the Government’s target of delivering 1.5 million new homes during this Parliament, especially for small and medium-sized homebuilders (SMEs).

The letter notes that no formal impact assessment has been conducted to estimate the levy effect on housing supply and that work to more accurately assess how much the funding might realistically be required to collect from industry will only be carried out during 2025.

HBF draws the Chancellor’s attention to the financial burden the levy will place on developers, especially SMEs already struggling with rising development costs and burgeoning regulatory pressures.

HBF further points out the inequity of the proposed levy, noting that UK homebuilders have already contributed £6.4 billion towards building safety remediation efforts through a 4% precept on Corporation Tax, along with additional self-remediation commitments from over 50 builders. By contrast, product manufacturers, some of whom were heavily criticised by the Grenfell Tower Inquiry Phase 2 report, have yet to contribute any financial support.

The letter argues that the need for the new tax has not been clearly demonstrated, especially considering that more than £2.5 billion remains unallocated in the existing £5.1 billion Building Safety Fund, established over four years ago. It calls for a more thorough analysis before proceeding with the levy, calling for the Government to publish a robust impact assessment and consider how the tax will affect the delivery of both private and affordable homes.

The letter concludes by urging the Government to reconsider the levy, emphasising the need to support the home building industry, a sector that supports 750,000 jobs and generates £40 billion in economic activity each year, to continue to deliver not just new homes but also economic growth."

Download a full copy of the letter here

The second part of this article is based on the HBF press release 'Home Builders Federation calls for suspension of the planned Building Safety Levy' dated 17 March 2025.