Scottish building safety levy - technical consultation

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Closes 9 Oct 2026

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Introduction

The Scottish Building Safety Levy is a new devolved tax on residential development, which will provide funding to support Scotland’s Cladding Remediation Programme. Passed by the Scottish Parliament on 17 March, The Building Safety Levy (Scotland) Act 2026 provides for the key elements of the Levy. The Scottish Government’s intended introduction for the Levy is 1 April 2028. This is subject to the successful introduction of secondary legislation in Scotland. 

To ensure the introduction and effective operation of the Levy, we are consulting on options for further exemptions and reliefs from the Levy, alongside administrative and technical proposals for its operation, prior to finalising decisions on secondary legislation.   

The Levy has been developed in line with our Scottish Approach to Taxation and wider housing policy objectives, including those set out in Housing to 2040. Its design reflects the need to raise revenue for remediation while minimising impacts on housing supply and supporting a sustainable housebuilding sector. To achieve this, the Levy will include exemptions for social and affordable housing, a tax-free allowance benefitting smaller developers, and targeted reliefs for particular types of development.

The Levy will also be subject to ongoing, regular review, and continued engagement with stakeholders. Full details of the scope and provisions of the Levy are set out in the fact bank below. 

This consultation seeks views on key elements of the Levy’s design, including the definition of the tax base, the scope for further exemptions or reliefs, and payment arrangements for different types of development. It builds on earlier engagement and related work undertaken by both the Scottish and UK Governments. Responses will inform the development of secondary legislation and help to ensure the levy operates effectively while avoiding unintended consequences for the housebuilding sector.

About the Scottish Building Safety Levy

Overview:

  • The Scottish Building Safety Levy is a new devolved tax on residential property development in Scotland.
  • It is established by the Building Safety Levy (Scotland) Act 2026.
  • Revenue from the levy will support Scotland’s Cladding Remediation Programme.
  • The Levy is expected to be introduced from 1 April 2028, subject to secondary legislation.

What the Levy Applies To (Scope):

  • The Levy applies to the construction of residential property development in Scotland.
  • This includes:
    • new residential units
    • conversions or changes of use that create new dwellings
  • The 2026 Act provides for key exemptions, including:
    • Social housing
    • Affordable housing
    • Residential development on islands
    • Certain institutional or specialist accommodation

Additional exemptions may be introduced through secondary legislation, including for some remote rural areas.

  • A levy-free allowance of 29 units per developer per year will apply to all units not exempt. Developers operating under the threshold of 29 units per year will not be required to engage with the Levy at all.

 

Who Pays the Levy (Taxpayer):

  • The Levy is payable by the owner of the property or unit at completion
  • In practice, liability will fall on the developer or the person responsible for the residential development.

When the Levy is Charged (Chargeable Event):

  • Liability for the Levy arises on the date of acceptance of a completion certificate for a liable building.
  • In cases where temporary occupation is granted prior to acceptance, the tax point is the date of the granting of temporary occupation.

How the Levy is Calculated:

  • The Levy will be calculated by reference to the floorspace (square metres) of residential development.
  • The Scottish Government is consulting on the detailed floorspace measurement methodology, including:
    • whether floorspace should be measured using Gross Internal Area (GIA)
    • the treatment of communal areas and common parts
  • A rate-per square metre is set for each local authority area, based on average house prices and sizes of homes in that area. Taxpayers will calculate their Levy charge by multiplying the total square meterage of the unit or building by the Levy rate for the relevant area.
  • A relief of at least 50% will be available for units built on brownfield land.

When the Levy is Paid:

  • The Levy will be paid after completion, rather than upfront.
  • Payment will be made through regular return periods. Taxpayers will be expected to make one return for each period.

Who collects the Levy:

  • Revenue Scotland will administer and collect the Levy.
  • Its responsibilities will include:
    • collection of the Levy
    • compliance and enforcement
    • guidance and support for taxpayers
  • The Levy will operate as a self-assessed tax within Scotland’s devolved tax framework.

Use of Levy Revenue:

  • Levy proceeds will be used to support the Scottish Government’s Cladding Remediation Programme.
  • This includes funding for:
    • building assessments, surveys and reports
    • remediation and mitigation works
    • broader activity to improve building safety
  • This ensures a clear link between revenue raised and its intended purpose.

Review and Evaluation:

  • The operation of the Levy will be subject to ongoing review and reporting.
  • Scottish Ministers must review and publish a report on the Levy at least every three years
  • The Levy includes a 15-year sunset clause, after which it will expire unless extended by regulations.