Scottish Building Safety Levy: consultation analysis report

1. Executive Summary

Overview

The Grenfell Tower fire tragedy in London in June 2017 highlighted concerns about the safety of medium and high-rise buildings with external wall cladding across the UK and demonstrated the need to take action to remediate buildings with unsafe cladding. On the day following the fire the then Prime Minister, Theresa May, announced that there would be a formal Inquiry into the tragedy.

The Inquiry, chaired by Sir Martin Moore-Bick, opened on 14 September 2017 and concluded with the publication of the Phase 2 Report on 4 September 2024. The Scottish Government response to the report was published on 25 March 2025.

The Housing (Cladding Remediation) (Scotland) Act 2024 was introduced by the Scottish Government to facilitate the delivery of the Cladding Remediation Programme (CRP), which aims to identify, assess, and address the safety risks of buildings within scope of the Programme.

To meet the costs associated with funding cladding remediation in England, the UK Government legislated through the Building Safety Act 2022 for the introduction through secondary legislation of a Building Safety Levy on the development of new residential buildings. The UK Levy will only apply to developments in England, meaning that the Scottish Government will receive no consequential funding as a result of its introduction. This creates a gap in the funding options available to address cladding remediation in Scotland.

The Scottish Government set out in its Programme for Government 2024-25 a commitment to introduce a Scottish Building Safety Levy (SBSL) to support the funding for Scotland’s CRP, following the devolution of the necessary powers. These powers were devolved on 19 December 2024.

The SBSL will be charged on the construction of new residential buildings in Scotland, with an estimated revenue target of £30 million per annum. The Building Safety Levy (Scotland) Bill was introduced to Parliament on 5 June 2025, and the Levy is intended to come into effect on 1 April 2027.

Consultation and engagement

In September 2024, the Scottish Government published a consultation seeking views on the SBSL and how it should operate. This consultation ran until November 2024 and was accompanied by a programme of stakeholder engagement.

Engagement also continued with the Scottish Building Safety Levy Expert Advisory Group. This group was established in May 2024 to inform policy development and provide expert advice, challenge and scrutiny of policy positions in relation to the SBSL.

This report provides an analysis of the responses submitted to the public consultation, and summarises, where relevant, views raised during accompanying stakeholder engagement sessions and meetings of the Expert Advisory Group.

The publication of this analysis report accompanies the introduction of the Building Safety Levy (Scotland) Bill to the Scottish Parliament.

Summary of views

From the consultation responses and engagement sessions, the Scottish Government received views from a range of individuals and organisations, including: representatives from the residential property development industry and related sectors; local government; and tax, accountancy, and legal organisations.

Some of the key views which emerged were:

• The view that property developers are already contributing to the cost of cladding remediation, and that the SBSL would constitute a disproportionate burden relative to level of responsibility for the problem.
• Emphasis on the importance of considering the impact of the SBSL within a wider context of cumulative impacts and regulations on the housebuilding industry.
• Strong support to exempt affordable housing from the SBSL.
• Strong support to exempt smaller developers from the SBSL.
• The view that there should be consideration of differing regional impacts of the SBSL, particularly on island and rural communities.
• Emphasis on the importance of certainty and clarity for property developers in understanding their liability for the tax and factoring these costs into their financial planning for development projects.

Next steps

The views gathered through the consultation and engagement have informed the Building Safety Levy (Scotland) Bill which has now been introduced.

The Bill will be considered by the Scottish Parliament in line with its established process for examining draft legislation, more details of which can be found on the Scottish Parliament website.

If the Bill secures Parliamentary approval, secondary legislation and preparatory work by Revenue Scotland will also be required before the SBSL can be formally introduced. This is in keeping with the approach taken with the other fully devolved taxes: Scottish Landfill Tax, Land and Buildings Transaction Tax, and Scottish Aggregates Tax.