The Building Safety Levy starts on 1 October. An appraisal that does not carry it is overstating land value

This is not a planning risk to keep an eye on. It is a statutory cost, fixed by the date of your Building Control application, which on a good many schemes is a decision that has to be taken within the next fortnight.

From 1 October 2026 a new statutory change applies to Building Control applications on major residential development in England. It is separate from, and additional to, CIL, section 106 and everything else already sitting in the appraisal. On a mid-sized scheme, it runs to six figures.

What is it

The levy is charged under the Building Safety Act 2022 on chargeable Building Control applications for residential schemes of ten or more dwellings, and on purpose-built student accommodation of thirty or more bedspaces. It is calculated as chargeable floorspace, measured as Gross Internal Area, multiplied by a rate set for each local authority, with a 50% discount where the site is previously developed land.

On an existing building the threshold is the net increase, so a conversion counts only where it creates at least ten additional dwellings or thirty additional bedspaces.

Affordable housing, care homes, school accommodation and almshouses are among the exempt categories. Liability sits with the named client on the Building Control application, and the levy must be paid before the final certificate is issued.

The date that matters is not the one you would expect

Chargeability turns on the date of the Building Control application. Not planning consent, not start on site, not completion. An application submitted on 30 September is not chargeable. The same application submitted on 1 October is.

That single fact is what makes this urgent rather than interesting. For a scheme with consent in hand and design information close to complete, there is a real decision to take this month. For a scheme that cannot realistically get an application in, the levy goes into the appraisal in full, today.

What it costs

Rates are not a flat national figure. MHCLG set a national revenue target of around £400 million a year and allocated it across authorities using each area’s three-year average housing completions, weighted by local house prices against the England average. The result is a rate per square metre calibrated to what local development economics will bear, which is why a neighbouring authority can look markedly different for no obvious reason.

• Wiltshire. £31.61 per square metre, or £15.80 on previously developed land.

• Bath and North East Somerset. £39.20, or £19.60.

• Swindon. £27.06, or £13.53.

• Kensington and Chelsea. £100.35, the highest in England, or £50.17.

Take a 60-unit scheme with 5,000 square metres of Gross Internal Area in Wiltshire. That is a levy of around £158,000 on a greenfield site, or £79,000 if the site qualifies as previously developed. The same scheme in Kensington and Chelsea would be a little over £500,000.

Why this lands on the value

In a residual appraisal the levy is a deduction from development cost capacity, so it comes straight off the land value the appraisal supports. Any appraisal used to justify an offer on a site still under negotiation should be rerun now.

It also reaches backwards. Where an appraisal underpinning an agreed land price, a funding agreement or a profit projection was prepared before this and does not carry the levy, and the scheme will not beat 1 October, that appraisal overstates land value.

One further trap. The levy is invoiced late, before the final certificate, so in a cashflow it sits near the end of the programme alongside a retention release. The late cash timing makes it feel like a problem for later. Whether it applies at all is settled now.

What to do with it in the appraisal

• Give it its own line. Not folded into build cost, not absorbed into contingency.

• Calculate it, do not estimate it. Actual chargeable GIA multiplied by the published rate for that authority.

• Confirm the previously developed land position before assuming the discount. Where it is unconfirmed, run both rates as a range.

• Treat the deadline as a variable, not an assumption.

• Sense check any dash for the deadline. An appraisal that assumes the levy is avoided on an unrealistic submission timetable overstates value.

What this means for your scheme

• Ten or more dwellings, applying for Building Control on or after 1 October: the levy applies in full and belongs in the appraisal now.

• The trigger is the Building Control application date. Not planning, not start on site.

• Check whether your site qualifies as previously developed land. It halves the charge.

• Any appraisal agreed before now that does not carry the levy, on a scheme that will miss the date, overstates land value.

To work it out for your scheme

• The architect's drawings and accommodation schedule.

• The site's address, and whether it is previously developed land.

• The expected date of the Building Control application.

Send these to mark@qsetc.uk. We will calculate the exposure and build it into your appraisal.

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Sources. The Building Safety Levy (England) Regulations 2025 and accompanying MHCLG guidance. Published local authority rate schedule.

First circulated to clients as a briefing note on 16 September 2026.