Draft Building Safety Levy (England) Regulations 2025
(Limited Text - Ministerial Extracts only)
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The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Samantha Dixon)
I beg to move,
That the Committee has considered the draft Building Safety Levy (England) Regulations 2025.
Is it a pleasure to serve under your chairmanship, Sir Desmond, in my first outing as the Parliamentary Under-Secretary of State for Building Safety, Fire and Democracy. This Government are committed to the remediation of residential buildings with unsafe cladding in England. Our remediation acceleration plan sets out how we will remove barriers so that buildings are fixed faster. Crucially, that will allow residents to be, and feel, safe in their homes.
The Government have already committed £5.1 billion of taxpayers’ money to the cost of remediation. We want to protect leaseholders and residents from further costs that are not of their making, and the building safety levy is an essential step in achieving this. Its purpose is to fund the Government’s building safety remediation programme—we estimate that we need to raise £3.4 billion over 10 years—and these draft regulations enable the levy to be imposed. The levy will be charged on certain building control applications for new residential floorspace in England. Subject to the approval of both Houses, it will start being charged from 1 October 2026.
Local authorities will collect the levy on behalf of central Government. They are well placed to carry out this role, as custodians of local building control with tax collection expertise. I thank local authorities for the vital role they will play and for the steps they are already taking to prepare. My officials are supporting them to ensure that they are ready for levy launch. We will provide collecting authorities with grant funding for set-up costs. All ongoing costs will be recoverable from levy revenue received.
The levy provides essential funding to deliver a safe built environment that meets residents’ needs. It complements our broader housing goals, including the delivery of 1.5 million high-quality homes over this Parliament. The levy is designed to minimise any detrimental impact on housing supply, while securing the required revenue. To achieve that, there are different levy rates for each local authority, reflecting local house prices. That protects viability in areas where house prices are lower. Development on previously developed land will benefit from a 50% discount rate. That discount compensates for the often higher cost of developing that type of land, ensuring that more sites remain viable.
The Government are committed to getting Britain building again. Small and medium-sized builders play a crucial role in driving up house building rates, but they have faced significant challenges in recent years. We are therefore helping SME developers by exempting developments of fewer than 10 dwellings from the levy charge.
Earlier this year, we announced the biggest boost to social and affordable housing investment in a generation. The building of more good-quality, affordable housing must be accelerated. With that in mind, all affordable housing is exempt from the levy charge. However, we have gone further: any housing built by a non-profit registered provider of social housing is also exempt. Profits from sales of such homes are often reinvested into the provision of further much-needed affordable housing.
In addition, supported housing and other types of important community facilities, such as hospices and care homes, are also exempt from this charge. We will keep the rates and processes under review and will report at least every three years. I commend the draft regulations to the Committee.
Samantha Dixon
I thank all hon. Members for their comments; I will try to respond to them as fully as I can.
First, on the ability of local authorities to respond to this change, the point is that the levy rates are set out in regulations, and any change would require further regulations approved by Parliament. We will undertake reviews every three years on the operation of the regulations. Should the amount of funding increase or decrease, decisions on those changes will be taken at that time. Our intention is to shorten or extend the anticipated duration of time over which the levy is collected, rather than increase or decrease the levy rates, which allows certainty for developers and landowners.
Of course, I would be more than happy to meet with my hon. Friend the Member for Rushcliffe and his constituent Glenda to discuss the very sad case of Amanda. The whole point of these regulations is to remediate buildings, particularly for leaseholders, as soon as possible so that such anxiety and a sense of being trapped is no longer experienced by residents across the country, so I will certainly do what my hon. Friend asks.
My hon. Friend the Member for Mid Derbyshire asked about exemptions. I will write to him on the detail, but the point is that there is the exemption, or reduction in the rates, for brownfield sites, which may be appropriate in that particular case. I will ask officials to write to him on the details of that particular issue.
The building safety level is essential to fund the remediation of historic building safety issues without further burdening residents and leaseholders. The Government are committed to delivering 1.5 million homes this Parliament to meet the country’s long-term housing needs and unlock growth. That mission must work in parallel with our commitment to remedying the building safety failures of the past. The industry that contributed to such problems must pay to remedy them. The draft regulations before the Committee set out a fair approach to collect the required funds, while ensuring minimal impact on housing supply and industry.
Question put and agreed to.