The Building Safety Levy: What Building Managers Need to Know Before October 2026

TL;DR: The Building Safety Levy is a new charge on developers established under Part 4 of the Building Safety Act 2022. Expected to launch in October 2026, it will fund the remediation of historical building safety defects through the Building Safety Fund. While the levy is charged to developers -- not building managers or leaseholders -- its downstream effects on remediation funding, new-build pricing, and service charge planning make it something every building manager should understand now.

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#What Is the Building Safety Levy?

The Building Safety Levy is a financial charge on developers who seek building control approval for certain types of residential building work in England. It is established under Part 4 of the Building Safety Act 2022 (sections 57 to 71) and collected by the Building Safety Regulator (BSR).

The Building Safety Levy is a charge on developers of new higher-risk buildings in England, intended to fund the remediation of historical building safety defects across the housing stock.

The purpose is straightforward: developers who profit from building new homes contribute to the cost of fixing historical safety defects in existing buildings. The levy revenue is paid into the Building Safety Fund, which finances remediation works -- primarily cladding and fire safety defect remediation -- in higher-risk buildings across England.

The levy sits within a broader remediation funding landscape that includes the developer self-remediation contracts (where major developers have committed to fixing life-critical defects in buildings they developed), the Building Safety Fund for non-developer-responsible buildings, and leaseholder protections under Schedule 8 of the Building Safety Act.

#How the Levy Works

#Who pays

The Building Safety Levy applies to developers seeking building control approval for new higher-risk buildings. Existing building managers are not directly liable for the levy, but may see its effects in construction costs and service charge implications.

The levy is charged to developers -- specifically, those seeking building control approval for prescribed building work in England. You do not pay the levy as a building manager, accountable person, or leaseholder.

The government's 2023 consultation proposed that the levy would apply to:

• Residential developments creating new dwellings
• Mixed-use developments with a residential element
• Certain conversions creating new residential units

#Exemptions and reduced rates

The consultation proposed exemptions or reduced rates for:

• Affordable housing -- to avoid increasing costs for social and affordable housebuilding
• Community-led housing -- community land trusts and similar organisations
• Certain regeneration projects -- where the levy could undermine urban renewal
• Minor developments -- below a threshold number of units (to be set by regulations)

The final exemption categories will be confirmed when the secondary legislation is published before the October 2026 launch.

#How it is calculated

The levy amount will be determined by regulations setting out the methodology. The government's consultation proposed a calculation based on the number and type of new dwellings created by the development, with rates varying by location to reflect regional differences in development economics.

This is not a flat fee. A 200-unit development in central London would pay a different levy amount than a 20-unit scheme in a regional town. The intention is to raise significant revenue without making development unviable.

#Why Building Managers Should Pay Attention

If the levy is charged to developers, why does it matter to you as a building manager? Three reasons.

#1. Remediation funding timelines affect your building

If your building has historical fire safety defects -- defective cladding, missing fire stopping, inadequate compartmentation -- the Building Safety Fund may be the mechanism that pays for remediation. The levy is one of the funding streams that keeps the Building Safety Fund operating.

Understanding the levy timeline helps you understand the remediation funding timeline. If your building is awaiting a Building Safety Fund decision, the levy's launch in October 2026 signals that the government expects the remediation programme to continue for years, with ongoing funding.

For building managers, this means:

• Remediation works may be planned or in progress for an extended period
• Service charge planning needs to account for potential remediation-related costs, even where the Building Safety Fund covers the primary works
• Associated costs (project management, temporary safety measures, resident communications) may still fall on the service charge

#2. New-build pricing may shift

If you manage buildings in developments where new phases are being built alongside existing occupied buildings, the levy could affect development economics. Developers may:

• Adjust new-build pricing to absorb or pass through levy costs
• Reconsider the scale or phasing of developments
• Factor levy costs into ground rents and estate service charges for new phases

This is speculative -- the actual impact will depend on the levy rates set by regulations -- but it is worth monitoring if your building is part of a larger development.

#3. Service charge planning for remediation works

Even where the Building Safety Fund covers the cost of major remediation, the building manager often needs to manage:

• Section 20 consultation for any works where costs are passed to leaseholders (even partially)
• Reserve fund contributions to cover associated costs not met by the Fund
• Interim safety measures while remediation is planned and executed
• Contractor management for remediation works, which may span months or years

For RTM directors managing service charge budgets, see our guide to service charges and building safety costs for RTM companies.

The relationship between safety obligations and financial management is where complexity lives. A building manager who tracks fire risk assessment actions but not the associated costs, or who manages remediation contractors but not the Section 20 consultation timeline, is managing only half the picture.

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#A Practical Scenario

You manage a 12-storey residential building with 60 flats, built in 2005. A building survey has identified defective fire stopping in service risers and combustible insulation in the external wall system. The estimated remediation cost is 1.8 million pounds.

Your building has applied to the Building Safety Fund. The application is under review. In the meantime, you have implemented interim safety measures: enhanced fire patrols, a waking watch for three months (now replaced by a common alarm system), and temporary fire stopping in the most critical locations.

The Building Safety Fund approves your application and covers 1.5 million pounds of the remediation cost. The remaining 300,000 pounds -- covering project management, interim measures already incurred, and works the Fund considers outside scope -- falls on the service charge.

With 60 leaseholders, that is 5,000 pounds per leaseholder. This exceeds the Section 20 threshold of 250 pounds, so you must run a full consultation before you can recover these costs. You need to track:

• The remediation works programme (safety compliance)
• The Building Safety Fund disbursements (funding)
• The Section 20 consultation stages (financial compliance)
• The service charge demands and payments (cost recovery)

This is the compliance-and-finance challenge in action. The levy funds the Building Safety Fund that partly pays for your remediation. But the financial management of everything around it -- the costs, the consultation, the service charge recovery -- lands on your desk.

#The Broader Remediation Funding Landscape

The Building Safety Levy does not operate in isolation. It is one piece of the government's remediation funding strategy.

#Developer self-remediation contracts

Over 50 major developers have signed the government's remediation contract, committing to fix life-critical fire safety defects in buildings over 11 metres that they developed. These developers fund remediation directly -- the Building Safety Fund and the levy are not involved.

If your building was developed by a contract signatory, the developer should be funding the remediation. If the developer is not fulfilling its commitments, the BSR can use enforcement powers.

#Building Safety Fund

The Building Safety Fund covers remediation costs for buildings where the original developer cannot be identified, has become insolvent, or is otherwise not funding the work. The levy is one of the funding streams for this programme.

#Leaseholder protections

Schedule 8 of the Building Safety Act protects qualifying leaseholders from bearing remediation costs for specified defects in certain circumstances. Building managers need to understand these protections because they affect which costs can and cannot be passed through the service charge.

The interaction between leaseholder protections, Building Safety Fund contributions, and service charge obligations is another area where compliance and financial management must work together. Tracking which costs are recoverable, which are protected, and which require consultation is essential -- and this is exactly the kind of complexity that breaks down in spreadsheets.

#Preparing Now: What to Do Before October 2026

Even though the levy does not directly charge building managers, there are practical steps to take now.

#1. Know your building's remediation status

If your building has potential fire safety defects, understand where you stand:

• Has an application been made to the Building Safety Fund?
• Is the original developer responsible under a remediation contract?
• What are the estimated costs, and who is expected to bear them?

#2. Review your service charge planning

If remediation costs (even partial) may fall on the service charge:

• Start the Section 20 consultation process early -- the 8-12 week timeline cannot be compressed
• Review your reserve fund adequacy for associated costs
• Communicate with leaseholders early and transparently

#3. Track compliance and costs together

Remediation programmes generate both safety obligations and financial obligations. Tracking them separately -- safety in one system, costs in another -- creates gaps. When the BSR assesses your Building Assessment Certificate application, they will look at your safety management. When leaseholders challenge costs at tribunal, they will look at your financial management. Both need to be in order.

Brocade connects compliance tracking with service charge management, so you can see the safety status and cost status of every action in one place. When a fire risk assessment action triggers remediation, you can track the contractor, the cost, the Section 20 consultation, and the service charge demand alongside the compliance record.

#4. Monitor the secondary legislation

The levy rates, exemptions, and collection mechanism will be set by regulations before October 2026. Monitor GOV.UK announcements and BSR communications for updates.

#Frequently Asked Questions

#What is the Building Safety Levy?

The Building Safety Levy is a charge on developers seeking building control approval for certain higher-risk building work in England. It is established under Part 4 of the Building Safety Act 2022 (sections 57 to 71) and is intended to fund the remediation of historical building safety defects. The levy is collected by the Building Safety Regulator and paid into the Building Safety Fund.

#When does the Building Safety Levy start?

The Building Safety Levy is expected to launch in October 2026, subject to secondary legislation setting the levy rates and collection mechanism. The government consulted on the levy design in 2023 and is expected to publish final regulations before launch.

#Will the Building Safety Levy increase service charges for leaseholders?

The levy is charged to developers, not directly to building managers or leaseholders. However, developers may factor levy costs into new-build pricing, which could indirectly affect purchase prices and ground rents. For existing buildings, the levy itself does not create a new service charge liability. However, remediation works funded by the Building Safety Fund -- which the levy finances -- may still trigger Section 20 consultation requirements when costs are passed through service charges.

#Does the Building Safety Levy apply to all buildings?

No. The levy applies to developers seeking building control approval for prescribed building work in England. The government has indicated that the levy will apply to residential developments that create new dwellings and certain mixed-use developments. Exemptions and reduced rates may apply to affordable housing, community-led housing, and certain regeneration projects. Final details will be set by regulations.

#How does the Building Safety Levy relate to developer remediation contracts?

The levy sits alongside the developer self-remediation programme. Major developers who signed the remediation contract have committed to fixing life-critical fire safety defects in buildings they developed. The levy provides an additional funding mechanism by charging developers who are building new residential properties, creating a broader contribution to remediation costs across the industry.

#Further Reading

• Section 20 Consultation and the Building Safety Act -- how safety works costs interact with leaseholder consultation requirements
• Building Assessment Certificates: How to Prepare -- what the BSR looks at when assessing your building
• The Building Safety Act 2022: A Complete Guide -- comprehensive overview of the BSA regime including the levy provisions
• The Complete Golden Thread Guide -- your information management duties under the Act
• Accountable Person Duties Explained -- understanding your obligations as an AP
• Higher-Risk Buildings: Definition and Criteria -- which buildings are affected by the levy
• Fire Risk Assessment Tracking -- tracking the FRA actions that generate safety costs

#Official sources

• Building Safety Act 2022 -- Part 4 (sections 57-71) -- the primary legislation establishing the levy
• GOV.UK: Building Safety Levy consultation -- the government's consultation on levy design
• GOV.UK: Building Safety Fund -- remediation funding information
• Building Safety Act 2022 -- Schedule 8 -- leaseholder protections

This article is for informational purposes. For building-specific advice, consult a qualified fire safety professional or solicitor specialising in leasehold law.

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