Building safety levy rate set at up to £10,000 a home in London

Developers will be forced to pay a building safety levy charge of up to £10,000 a unit for homes they build in upmarket London boroughs like Chelsea.

The Government has announced the varying new building safety levy rates it intends to charge as a tax on new homes and student accommodation projects across the country.

In a small reprieve for developers, ministers have pushed back the levy’s introduction from this Autumn to Autumn 2026, giving the house building industry more time to adapt.

Rates will vary across local authorities in England and will be charged on a sq m basis rather than the unit basis industry called for during consultation. Schemes on brownfield land will receive a 50% levy discount.

In Kensington and Chelsea, this means building a large 100 sq m home on a previously undeveloped plot could cost around £10,000 a unit, while in County Durham, the rate for the same-sized property would be around £1,270.

In practice, most London schemes will be built on brownfield land, meaning the new build tax for a large home would come down to around £5,000 a unit. In the north east of England homes on brownfield land would attract a charge around £635.

The government said that over time it expected the cost of the levy would be reflected in the price that developers pay for land and therefore not be passed on to home buyers.