Scottish Building Safety Levy: technical consultation

1. Introduction

1.1 Background

The Building Safety Levy (Scotland) Act 2026 (“the 2026 Act”) provides for the key elements of a new devolved tax on the construction of new residential development in Scotland – the Scottish Building Safety Levy (SBSL). The SBSL is a wholly new tax in Scotland and is broadly comparable to the UK Government’s Building Safety Levy, which is due to commence in England on 1 October 2026.

The 2026 Act was introduced to the Scottish Parliament in June 2025 and approved by the Scottish Parliament in March 2026. The legislation received Royal Assent and became an Act of the Scottish Parliament on 13 May 2026.

The SBSL will be introduced on 1 April 2028, subject to the successful introduction of secondary legislation which will provide further detail on the operation and administration SBSL.

1.2 Scottish Approach to Taxation

The design and development of the SBSL continues to be underpinned by the Scottish Approach to Taxation, as set out in and guided by our Framework for Tax and our Tax Strategy. The Framework for Tax sets out the six principles – certainty, proportionality, convenience, efficiency, effectiveness and engagement – and strategic objectives that underpin the Scottish Approach to Taxation, as well as our approach to decision making, engagement and how we manage and sequence tax policy and delivery. The Tax strategy expands on the Framework for Tax and sets out the next steps in the evolution of the tax landscape in Scotland. The Strategy also sets out the Scottish Government’s medium-term ambitions for how the tax system will develop to support the delivery of the four government priorities: eradicating child poverty, growing the economy, tackling the climate emergency, and ensuring high quality and sustainable public services.

1.3 Alignment with our Vision for Housing

The SBSL has been designed in line with our Housing to 2040 ambition for everyone to have a safe, good quality and affordable home that meets their needs in the place they want to be. Revenues raised from the tax will be ring-fenced for funding the work of the Cladding Remediation Programme^[1], ensuring that these funds are directed to supporting the rehabilitation of Scotland’s existing housing stock.

The scope of the SBSL has also been shaped by our 2040 Strategy and our Housing Emergency Action Plan, to ensure the tax operates as frictionlessly as possible over the housebuilding sector. This includes exemptions from the SBSL for social and affordable housing, residential institutions and housing built on islands.

To protect our rural and smaller housebuilders, levy payers will benefit from an annual tax free allowance of 29 units. The allowance will remove around 85 per cent of developers from the scope of the levy entirely, protecting small-scale developers and supporting a healthier and more diverse housebuilding sector. The allowance will also benefit development in rural areas, removing up to 89 per cent of units from the levy in classes 4 and 6 of the Scottish Government Urban-Rural Classification, depending on developer behaviour.

The proposals in this consultation seek to add to and complement these measures though targeted support for other key areas of the housebuilding sector.

The Scottish Government is committed to regularly reviewing the performance of the SBSL to ensure it is operating as frictionlessly as possible across the housebuilding industry. The 2026 Act requires the Scottish Government to report on its operation at least every three years from the date of introduction. We will use this milestone to engage with industry, assess any impacts and where needed, propose changes to the SBSL in order to best respond to and reflect on changes to the housebuilding industry and the supply of new homes.

1.4 Purpose

This consultation seeks views on approaches for the floorspace methodology for the SBSL, options for refining the tax base through further exemptions or reliefs, and payment flexibilities for certain development types. This will enable the Scottish Government to obtain views from the public and professional experts to inform the development of SBSL policy in advance of the introduction date of 1 April 2028.

This consultation builds on engagement already undertaken to shape the design and implementation of the SBSL. This includes the joint UK-Scottish Government consultation on the devolution of powers for the Levy published in January 2024, our Consultation on the principles of a SBSL, published in September 2024, the work of the Building Safety Levy Expert Advisory set up to information policy development on the SBSL, and reflects on the work undertaken by the UK Government in shaping its England-only Levy through consultation.

1.5 Scope

This consultation will run for 10 weeks until 9 October 2026 and offers the opportunity to comment on a range of aspects of policy which aim to ensure the SBSL achieves the policy intention of providing funding for the Cladding Remediation Programme whilst operating as frictionlessly as possible on the housebuilding sector. Views captured will also help to inform relevant impact assessments and ensure the SBSL does not create unintended consequences.

The Scottish Government will carefully consider all responses to the consultation, prior to finalising decisions on secondary legislation for introduction to the Scottish Parliament.

The consultation document contains information and questions on six areas of policy design. These are:

1. The definition of chargeable floorspace to be used for the SBSL

2. The treatment of communal areas of a building

3. The definition and rate of brownfield relief

4. The exemption of converted buildings from the SBSL

5. Payment flexibilities for build to rent and purpose-built student accommodation developments; and

6. Support for new homes sold on to first-time buyers

This document should be read in conjunction with the publication of indicative rates for the SBSL, published alongside this consultation on 31 July 2026.

Further details on how to participate in the consultation and the processes for submitting a response is provided at Citizen Space.