The Building Safety Levy comes into operation in England on 1 October 2026, introducing a new charge on certain developments that create new homes.
The levy is intended to raise funds towards addressing historic building safety defects. It will apply to certain building control applications and notices for new residential development submitted from 1 October, with the amount varying according to the local authority area and whether the site is previously developed land. Developments on previously developed land receive a 50% discount.
For those working in the custom and self build sector, an important exemption is that developments of fewer than 10 dwellings are not subject to the levy. This means individual self-builders and smaller schemes will generally fall outside its scope, although larger custom-build developments may need to factor the levy into project costs and viability.
The Government has also confirmed that applications submitted before 1 October will not become liable simply because they are subsequently varied, although there are specific rules around rejected applications that are resubmitted after the levy takes effect.
With the levy now imminent, developers and professionals involved in larger custom and self build schemes should check whether their projects are within scope and understand how the charge could affect development costs and project planning.
The HBF published research on 18 August 2026, showing that 91% of SME housebuilders surveyed believe the levy will make developments financially unviable, while 69% said it would make them less likely to invest in new development opportunities.
Neil Jefferson said:
“The new levy, compounded by other rising costs, tighter margins and challenging market conditions, will make even more developments unviable. SME developers in particular are being forced to rethink investment decisions, delay sites and reduce output as costs continue to increase.
