Explainer for small builders
Building Safety Levy: Does It Affect Small Builders?
TL;DR
The Building Safety Levy is a tax on new residential buildings in England, charged on building control applications made from 1 October 2026. It only applies to developments of 10 or more new dwellings (or 30 or more student bedspaces), and the client the work is done for pays it, not the builder doing the work. Extensions and improvements to homes that create no new dwellings are not charged.
This explainer covers England. The levy regulations apply in relation to England only, and Scotland has its own Building Safety Levy (Scotland) Act 2026.
Since 1 October 2026, some building control applications in England have a new tax attached. If you mainly do extensions, lofts, refurbishments and the odd new house, the short answer is that it is unlikely to land on you. This page explains who pays, which work is charged, and the cases where a small firm should check.
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What the Building Safety Levy is
The government describes the levy as a tax on new residential buildings. The guidance says the money raised will contribute to fixing building safety defects across England.
It is set out in the Building Safety Levy (England) Regulations 2025, which came into force on 1 October 2026. The regulations do not apply to building control applications made before that date. The government's guidance adds one catch: an application made before 1 October 2026 that is rejected and resubmitted on or after that date is liable for the levy.
The levy is attached to the building control application, not to planning permission and not to your contract. It is not a health and safety duty, and it does not change anything under CDM 2015.
Who pays it
The guidance says the client for the building control application is responsible for paying the levy where it is due. It defines the client as the person for whom the works are carried out. On a housing scheme, that is normally the developer.
So if you are a builder or subcontractor working for a developer, the levy is not your bill, even on a large site that is charged. If you buy a plot and build homes to sell, you are the client, and the levy is yours if the scheme is charged.
The guidance says the levy must be paid before the building work is completed or the building is occupied, whichever is earlier.
Which work is charged
Under regulation 15, a building control application is charged only when both of these are true:
- The work creates residential floorspace. That means a new building with residential floorspace, an existing building gaining residential floorspace for the first time, or an existing building with more residential floorspace than before, whether by extension or change of use.
- It is major residential development, or part of one. Regulation 6 defines major residential development as at least 10 dwellings, or at least 30 bedspaces in purpose-built student accommodation.
For an existing building, only the increase counts. A conversion is major residential development only if the building ends up with at least 10 more dwellings than it had before.
The guidance puts the small-job position plainly: developments of fewer than 10 new dwellings or 30 new bedspaces are exempt. It also says building control applications for extensions or improvements to homes that create no new dwellings do not need to provide levy information at all.
Watch for the “part of a wider development” rule. Building work is caught if it is carried out under a planning permission for a wider development that is major residential development. Building three houses on one phase of a larger permitted scheme of 10 or more is not the same as building three houses on their own.
Exempt clients and buildings
The guidance lists three kinds of exemption:
- Exempt clients. An application is not charged if the client is a non-profit registered provider of social housing, such as a housing association.
- Exempt dwellings. These cover homes for affordable rent, social rent and intermediate rent (with some exceptions in the regulations), shared ownership homes, homes sold for no more than 70% of their market value, and supported housing provided by a local authority, housing association, charity or voluntary organisation. The guidance says exempt dwellings still count towards the 10-dwelling threshold.
- Excluded buildings. These include hospitals, hotels and hostels, care homes and hospices, school accommodation for students, almshouses, accommodation for victims of domestic abuse, temporary accommodation for homeless people, children's homes, prisons and other secure accommodation, and Ministry of Defence, Crown and armed forces accommodation.
The full lists are in Schedules 1 and 2 to the regulations and in section 1 of the guidance.
The levy is the client's bill: keep your own RAMS and CPP in order
Set up a free account and generate the RAMS, construction phase plan and site induction for one real job. No card needed.
Start free →Your jobs: charged or not?
The table further down this page runs through the jobs small firms do most. In short:
- Extensions, loft conversions and refurbishments for a homeowner are not charged.
- One new house, or a scheme of fewer than 10, is not charged on its own. Check whether it sits inside a larger planning permission.
- Working for a developer on a charged site does not make you liable. The client pays.
- Building 10 or more homes as your own development is charged, and you are the client.
How the amount is worked out
The levy is charged per square metre of chargeable floorspace. The rate depends on the local authority area, and the rates are listed in Schedule 3 to the regulations. The guidance says the rate for previously developed land is half the standard rate.
We do not print the rates here, because they differ by area and can change. Use the current table in section 2 of the government's guidance for the site's local authority.
What to do as a small builder
- For extensions and refurbishments, carry on as before. The levy does not change your building control application.
- If you are pricing or buying land for new homes, count the dwellings in the whole planning permission, not just your phase.
- If a client asks who pays, the answer in the guidance is the client the works are carried out for.
- If a scheme might be near the threshold, speak to your building control body and an accountant or tax adviser before you commit.
The levy sits beside your other duties, not instead of them. For building control on domestic work, see our guide to building control for extensions, and for the dutyholder rules in the Building Regulations, see Building Regulations dutyholders and competence.
Common questions
Do I pay the Building Safety Levy on a house extension?
No. The government's guidance says building control applications for extensions or improvements to homes that do not create any new dwellings do not need to provide levy information. The levy is charged on developments that create 10 or more new dwellings, so a homeowner's extension, loft conversion or refurbishment is outside it.
Who pays the Building Safety Levy: the builder or the developer?
The client for the building control application pays it. The guidance defines the client as the person for whom the works are carried out, so on a housing development that is normally the developer. A builder or subcontractor working for that developer does not pay the levy just because they do the work.
Is a small development of a few houses charged?
Not on its own. The guidance says developments of fewer than 10 new dwellings or 30 new bedspaces are exempt from the levy charge. Check the planning permission, though: the regulations also charge building work that is part of a wider development of 10 or more dwellings, so a few plots on a larger site can still be caught.
When did the Building Safety Levy start?
The Building Safety Levy (England) Regulations 2025 came into force on 1 October 2026. They do not apply to building control applications made before that date. The guidance adds that an application made before 1 October 2026 which is rejected and resubmitted on or after that date is liable for the levy.
Does the Building Safety Levy apply in Wales, Scotland or Northern Ireland?
The England regulations apply in relation to England only. Scotland has its own Building Safety Levy (Scotland) Act 2026, so a Scottish project needs checking against that Act and Scottish guidance. This guide covers England.
How much is the Building Safety Levy?
It is charged per square metre of chargeable floorspace, at a rate set for each local authority area in Schedule 3 to the regulations. The guidance says sites on previously developed land pay half the standard rate. Rates differ by area, so check the current table in the government's guidance for the site's local authority.
What the levy means for a small building firm
Pros
- Extensions, loft conversions and refurbishments for homeowners are not charged.
- A one-off house or a small scheme of fewer than 10 dwellings is exempt on its own.
- The client the work is done for pays, so a subcontractor does not carry the bill.
- Applications made before 1 October 2026 are not caught, unless rejected and resubmitted.
Cons
- A few plots can be charged if they are part of a wider planning permission for 10 or more dwellings.
- If you build for yourself as the developer, you are the client and the levy is yours.
- Rates differ by local authority, so the cost of a scheme depends on where it is.
- It is a tax with its own rules: take advice before pricing or buying a site.
| Job | Charged? | Why |
|---|---|---|
| Rear extension or loft conversion for a homeowner | No | Extensions or improvements to homes that create no new dwellings are outside the levy. |
| Kitchen, bathroom or full refurbishment | No | No new dwellings are created. |
| One new house, or a scheme of 2 to 9 houses | No, on its own | Fewer than 10 new dwellings is exempt, unless it is part of a wider development of 10 or more. |
| Converting a house into 3 flats | No | The net increase in dwellings is below 10. |
| Working as a subcontractor on a 40-home estate | Not you | The levy is charged, but the client the work is for pays it. |
| Building 12 flats as your own development | Yes | 10 or more new dwellings, and you are the client. |
“The Building Safety Levy (the levy) is a tax on new residential buildings.”
“Developments of fewer than 10 new dwellings or 30 new bedspaces are exempt from the levy charge.”
The levy is the client's. The site paperwork is yours.
Build the RAMS and Construction Phase Plan for one real job, and keep them with the project.
Sources
- Building Safety Levy: Guidance, Section 1: Introduction — Ministry of Housing, Communities and Local Government (GOV.UK) · Accessed 31 October 2026
- Building Safety Levy: Guidance, Section 2: Levy rates and calculations — Ministry of Housing, Communities and Local Government (GOV.UK) · Accessed 31 October 2026
- The Building Safety Levy (England) Regulations 2025, regulation 1 — legislation.gov.uk · Accessed 31 October 2026
- The Building Safety Levy (England) Regulations 2025, regulation 6 — legislation.gov.uk · Accessed 31 October 2026
- The Building Safety Levy (England) Regulations 2025, regulation 15 — legislation.gov.uk · Accessed 31 October 2026
- Building Safety Levy (Scotland) Act 2026 — legislation.gov.uk · Accessed 31 October 2026
This guide is general guidance, not legal or tax advice. Check the regulations and the government's guidance for your own project.