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In September 2024, the Scottish Government opened a consultation inviting views on its proposals to introduce a building safety levy for new residential developments.

The purpose of the levy is to fund the costs to remediate serious fire and building safety defects. Following the Grenfell Tower tragedy it uncovered that many homeowners and tenants were living in buildings with serious safety defects to external wall cladding, the Scottish Government announced their commitment to do what is right and necessary to fix these issues properly. But addressing these essential works comes at a substantial cost that the Scottish Government cannot fund from public finances alone.  

The proposals set out mirror those being introduced by the UK Government as part of its UK Building Safety Act 2022. No date has been set for when the levy in England will be launched but the consultation period closed earlier in the year following two rounds of feedback with the outcome still pending. The UK Government’s building safety levy only applies in England, limiting the location of the levy means that Scotland will have a significant funding gap to address essential building repairs.

According to data published by the Scottish Government it is estimated that around 1,000 high-rise and 5,000 medium-rise buildings are considered at risk and earmarked for the cladding remediation programme. The Government are currently conducting an exercise to estimate the number of buildings within the scope of the programme. Until this exercise is completed the estimated cost of the programme cannot be defined. 

Published in the Programme for Government 2023-24 Scottish Government committed to engaging with the UK Government initiating a request to transfer powers to create a Building Safety Levy in Scotland. This process is expected to be completed in the coming months.

The consultation seeks views and evidence on how a Building Safety Levy should be structured and operated in Scotland, taking into account the distinct characteristics and needs of the Scottish housing market. The Government would like to hear from a wide range of individuals and organisations with experience in the housing sector, particularly those involved in construction, procurement for development, and the sale of residential property to share their thoughts on the proposals.

The structure of the consultation is comprised of four parts:

Part A – Principles – considers:

• The strategic context and case for a Scottish BSL to fund cladding remediation work in Scotland
• The scope of the levy on the residential development sector
• Consideration of exemptions and reliefs
• The method for calculating the levy

Part B – Operational Considerations – considers:

• The revenue authority
• Returns and payment
• Tax compliance and penalties
• Appeals and Reviews

Part C – Impacts – considers relevant impact assessments that are being or

may be prepared as part of the process to develop a Bill providing for the Scottish BSL:

• Impact assessments
• Business and Regulation
• Child Rights and Wellbeing
• Environment
• Equality
• Fairer Scotland Duty
• Island Communities

Part D – Reference and Response – includes background information that may be helpful, a full list of consultation questions, and details of how to submit a response:

• Glossary of Terms
• Question List
• Responding to this Consultation

The deadline to contribute to the consultation is 18 November 2024.

Add your views to the consultation for Scottish Government’s Building Safety Levy  https://consult.gov.scot/taxation-and-fiscal-sustainability/scottish-building-safety-levy-proposals/consultation/subpage.2016-07-07.1474135251/