The Building Safety Levy: a Gateway 3 cost that starts on day one
Team@HAALO.co.uk, HAALO · October 2026
The Building Safety Levy came into operation on 1 October 2026. It applies to building control applications made on or after that date for residential schemes of ten or more homes, and for purpose-built student accommodation of 30 or more bedspaces, whatever the height. Conversions and change of use to residential are included, and the threshold is set by the planning permission, not by each application. The money goes to central government and must be spent on building safety.
Who pays
The “client” named on the building control application. Social housing is exempt, as are a short list of other uses including care homes, hospitals and hotels. Build-to-rent and student accommodation are not.
What it costs
The levy is charged per square metre of gross internal area, at a rate set for each local authority. It’s halved where at least 75% of the site is previously developed land. London sits at the top: £100.35 in Kensington and Chelsea, £98.01 in Westminster. County Durham is lowest at £12.70. A 100-flat tower in Westminster of around 8,000m² would pay roughly £784,000, or £392,000 on previously developed land.
Where it bites
Timing. The levy is calculated from information given at application and first commencement, and must be paid in full before a completion certificate is issued. For a higher-risk building, that means before the application to the Building Safety Regulator at Gateway 3. On the Building Safety Regulator route, the local authority’s liability notice alone can take seven weeks, or ten with a spot check. A scheme that finishes construction with the levy unresolved has one more thing between it and occupation. Getting the levy into the programme on time is a test of the same competence the Regulator expects at every gateway.
For investors
Applications submitted before 1 October 2026 are not liable, though one rejected and resubmitted after that date is. For anyone buying or funding a scheme, the date of the building control application is now a value question as well as a compliance one.
Our view: a Gateway 3 item, not a finance item
Our view: don’t leave the levy to the finance team at the end. Treat it as a Gateway 3 dependency from the first programme. Know your application date, your local authority rate and whether the site counts as previously developed land. Put the liability notice and the payment into the programme alongside the Gateway 3 submission, and keep the evidence for both with the rest of the completion pack. A scheme that reaches completion with the levy unpaid cannot be issued its completion certificate, however good the building.
Questions worth asking now
- Was the building control application made before or after 1 October 2026?
- Has your local authority issued the levy liability notice, and for how much?
- Does the site qualify as previously developed land?
- Is payment in the programme ahead of the Gateway 3 application?
These are the questions our Asset Defensibility work starts from, as part of our wider Building Safety Act and Gateway advisory.
This paper sets out HAALO’s professional perspective on this matter at the time of drafting. It is meant to be general information, not advice or legal/ financial opinion on any specific building. The content of this paper should not be relied upon and we always recommend the reader retains its own professional advisory team.
