The safety levyis paid out of the land bid

CThe Building Safety Levy applies in England to building control applications made on or after 1 October 2026 for 10 or more new dwellings, or 30 or more purpose-built student bedspaces². The regulations were made on 19 November 2025, and amending regulations made on 12 September 2026 changed how underground buildings count towards the previously developed land test²³.

CThe rate is charged per square metre of new floorspace by council area, from £12.70 in County Durham to £100.35 in Kensington and Chelsea, and halved where at least 75% of the site is previously developed land¹. It must be paid before the earlier of the completion notice date and first occupation².

CThe government's impact assessment puts the average levy at 1.1% of the house price on land not previously developed and 0.55% on previously developed land⁴. It sees little or no scope to pass the cost to buyers, because most home sales are of existing homes⁴.

CIt also states the mechanism. A developer will not pay more than the residual land value, so a cost that the landowner or developer cannot absorb makes the site unviable⁴.

AFor an illustrative scheme of 5,000 square metres of chargeable floorspace, the standard bill is £63,500 in County Durham, £142,200 in Manchester and £501,750 in Kensington and Chelsea, and half of each on qualifying previously developed land¹. The same building prices about eightfold differently by postcode.

AThe cash is also late. The bill falls due near completion, after land, build and finance are committed, so a lender's cost to complete should carry it from the start. A land bid agreed before the rate table was in hand has no line for it.

ALand buyers should deduct the levy from residual value for every scheme that has not yet applied for building control, at the council's own rate. Sellers holding options or conditional contracts agreed before October should expect that conversation. Lenders should add the levy to the cost to complete. Demand follows for appraisal reviews, floorspace measurement to the stated standard and checks on previously developed land status, where half the bill is decided.

OUR PERSPECTIVE

The levy is small on average. It decides the sites at the margin.

ROne developer chief executive told trade press on commencement day that viable development is possible in a little over a third of the country⁵. That is a view from the sector, with no data behind it in the report.

IIf buyers of new homes absorb the levy, land prices hold and the argument weakens, though the government's assessment judges that unlikely⁴. The £3.4bn target may be adjusted as remediation data update, and rates and exemptions are reviewed at least every three years, so the bill itself may move⁴.