Building Safety Levy Bill passed

Significant funding to fix building safety issues in Scotland will be unlocked thanks to new legislation.

The Building Safety Levy Bill, which has been approved by the Scottish Parliament, will see a tax charged on the construction of certain new residential properties from April 2028.

This measure is in line with equivalent legislation in England.

The levy aims to raise £450 million over 15 years to help fund work to fix residential buildings with unsafe cladding which have no linked developer.

Public Finance Minister Ivan McKee said:

“The Scottish Government has stepped in to marshall the necessary work to protect and repair Scotland’s existing housing stock and to ensure it is properly funded.

“Cladding remediation is set to cost between £1.7 billion and £3.1 billion over the next 15 years. To ensure Scotland’s public finances are sustainable, it is right that a contribution to these costs is made by the residential property development industry, just as they will be doing in England.

“All revenues raised will be spent on efforts to rehabilitate existing stock, which will improve safety for residents and homeowners and support the alleviation of the housing emergency.”

Background 

Building Safety Levy (Scotland) Bill

Since Bill introduction in June last year, the Scottish Government has taken a number of decisions intended to support the industry. These include:

• deferral of the introduction of the levy to April 2028
• support for an amendment to increase the annual levy-free allowance per taxpayer
• Introduction of provisions which will tie the use of the funds raised to the operation of the Cladding Remediation Programme

The legislation includes provisions to exempt certain types of development, including social and affordable housing.

The Bill sets out a provision for a regular review period for the levy, which will be an opportunity to consider the revenue target in light of the prevailing housing market and wider economic conditions, as well as the emerging position on the scale and profile of spending on our cladding remediation work.  

Estimated costs for the Scottish Government’s cladding remediation programme: Cladding remediation: capital spend forecasting - gov.scot