On 1 October 2026 a new charge starts in England. It is called the Building Safety Levy, it applies to almost every housing scheme of any size, and it is calculated in a way that will be familiar to anyone who has read a viability assessment.
The levy raises money towards remediating unsafe buildings. That purpose is not in dispute here and this piece is not about whether it should exist. It is about where the money comes from, because the answer is less obvious than it looks, and because one feature of the design deserves more attention than it has had.
Which developments pay the Building Safety Levy.
The levy applies to what the guidance calls chargeable developments. There are three triggers, and a scheme only has to meet one.
Ten or more new dwellings. Or at least 750 student bedspaces in purpose built student accommodation. Or a building of at least 7 storeys containing at least 20 residential units.
The first of those is the one that matters for most of the development this publication writes about. Ten homes is a small site. The 150 home scheme at Lechlade is caught. So is a 12 home infill on the edge of a village.
The charge is calculated on gross internal area: the floor space inside the external walls, measured in square metres, across the new residential floorspace in the scheme. It is not a percentage of value and it is not negotiated. It is a rate multiplied by an area.
Building Safety Levy rates, from £12.70 to £100.35 per square metre.
Every local authority area in England has its own rate, and the spread is wide.
At the bottom is County Durham at £12.70 per square metre. At the top is Kensington and Chelsea at £100.35. Most authorities sit somewhere between.
To make that concrete, take a house of 90 square metres, which is about the size of a typical new three bedroom home. In County Durham the levy on that house is roughly £1,143. In Kensington and Chelsea it is roughly £9,032. On a scheme of 30 such houses, the same figures come to about £34,000 and about £271,000.
Those are not trivial sums on a small scheme and they are not enormous on a large one. Which is precisely why the interesting question is not how big the levy is. It is who ends up paying it.
Why the greenfield rate is double the brownfield rate.
Here is the feature worth the attention.
Previously developed land receives a 50% discount. Land that is not previously developed does not. So the rate on a green field is exactly twice the rate on a brownfield site in the same authority. County Durham is £12.70 against £6.35. Kensington and Chelsea is £100.35 against £50.17. At least 75% of the site has to meet the previously developed definition for the discount to apply, so a scheme that is mostly field with a barn on it does not qualify.
That is a deliberate financial steer, written into the rate card, pushing development towards land that has been built on before.
It is also the first mechanism in some time that pushes in the opposite direction to the one setting the numbers. The standard method that produces a council's housing target reads the ratio of local house prices to local earnings and generates a figure from it. It has no view on where the homes go. In a district like Cotswold, where around 80% of the land sits within a National Landscape, the arithmetic funnels growth onto whatever is left, and what is left is very largely fields.
So a rural district now has a formula pointing at its greenfield land and a levy making that land more expensive to build on. Both are national policy. Neither appears to have been designed with the other in mind.
How the levy differs from Section 106 and the Community Infrastructure Levy.
It is, and the distinction is worth drawing because the three charges do different things.
The Community Infrastructure Levy is also a fixed rate per square metre set by the local authority, and it looks very similar on an appraisal. Section 106 is a negotiated agreement securing affordable housing and specific contributions. Both of those exist to make a particular development acceptable in a particular place, and both spend the money broadly where the development happens. That is what makes them defensible to a parish that is about to receive 150 homes: the school place, the junction, the drainage, the affordable units.
The Building Safety Levy is not that. It is a national charge collected to remediate unsafe buildings elsewhere. A village taking a greenfield scheme will pay the levy at twice the brownfield rate, and none of it comes back to the village.
That is a reasonable policy choice and it is how a national remediation fund has to work. It is worth being clear about, because when a viability assessment argues that the affordable housing has to fall, the money it is falling to cover will not be spent locally.
Who actually pays, under a residual land valuation.
This is the part that decides whether the levy does anything at all, and it turns on a piece of arithmetic this publication has written about before.
Development land is valued residually. You take the value of what will be built, subtract everything it costs to build it, subtract the developer's required profit, and whatever is left is what the land is worth. The land price is the remainder, not an input.
Follow that through and a new fixed cost has an obvious destination. The levy is a build cost. Build costs go up, the residual goes down, and the land is worth less. The landowner pays, through a lower price, and nobody else is affected.
That is the theory, and it is the theory on which the levy is designed. It is also what happens when the land has not been bought yet.
A new cost does not arrive in a vacuum. It arrives in a valuation that has already been done, on land that has already been priced, under an option agreement that was already signed.— The Editor · Ground Level, August 2026
In practice most strategic land is tied up years before a spade goes near it, under an option or promotion agreement signed when the numbers looked different. The landowner has already been told what the land is worth. The appraisal that produced that figure did not contain a levy, because the levy did not exist. And a developer that has already committed to a price does not get to go back and reduce it because a new charge has arrived.
So the cost has to come out of something else. There are three places it can go, and only one of them is the landowner.
It can come out of the developer's margin. On the evidence of every viability assessment this publication has read, that is the least likely outcome. Margin is treated in appraisals as a fixed requirement rather than a residual, which is the whole reason the land price moves instead.
It can come out of the land, if the deal is not yet done. That is the intended answer and it will be the real one on sites that are still being negotiated.
Or it can come out of the scheme's obligations, through a viability assessment arguing that the affordable housing has to fall for the scheme to remain deliverable. Councils see a great many of these. They are prepared by the developer's consultants, on the developer's assumptions, and a district planning department that is short of staff is not always in a position to test them properly.
The December 2024 framework tightened this. Schemes that comply with policy are now presumed viable, assessments must be published, and the price paid for the land cannot be used as a reason for non-compliance. The draft framework consulted on over the winter proposes going further, limiting viability assessments to unforeseen circumstances and standardising the developer profit margin at 17.5%. That draft has not been published in final form.
Which leaves an awkward timing. A new, unforeseen, non-negotiable cost lands on 1 October 2026, at a moment when the rule that would stop it being used as a viability argument is still a proposal in an unpublished document.
How to check the levy on an application near you.
Three things, and all of them are visible from outside.
The first is whether viability assessments start naming the levy. It is a defined, published, non-negotiable figure, which makes it unusually easy to check: rate times floorspace, and the rate is public. If an assessment claims a levy cost, the arithmetic can be verified in a minute, which is not true of most of the lines in those documents.
The second is what happens to schemes straddling the start date. Anything permitted before October but built after it is where the arguments will be.
The third is whether the doubling changes anything. It is a genuine incentive and it is aimed at exactly the right thing. Whether an extra £6.35 per square metre is enough to move a promoter off a field, against a formula that is pointing at that field and a council that cannot demonstrate five years of supply, is a question the next two years will answer.
The levy rate for your district is published. So is the floor area of any application in front of your council. The two of them multiply.