Building Safety Act 2022: Second Consultation Launched On Expanded Building Safety Levy

• Published date: 02 December 2022
• Subject Matter: Real Estate and Construction, Construction & Planning
• Law Firm: Gowling WLG
• Author: Ms Sue Ryan, Gemma Whittaker, Sean Garbutt and Emma Knight

The Department for Levelling Up, Housing and Communities (DLUHC) has published its second consultation on the Building Safety Levy, which is part of a package of measures proposed by the Government to ensure that the burden of paying to fix historical building safety defects does not fall on leaseholders.

The scope of the levy has been significantly expanded since it was initially proposed: it will now apply to all new residential developments in England that require building control approval, irrespective of their height.

We describe below the background and legislative basis of the levy, and consider some of the key proposals for the technical detail and implementation of the levy, which are revealed in the consultation paper.

Background

The Government's proposal for a levy was first announced in February 2021, at which point it was envisaged that this would only apply to higher-risk buildings (HRBs). The first public consultation on the Building Safety Levy, which closed in October 2021, also envisaged that the levy would apply only to HRBs. No formal Government response to that consultation has ever been published. The current consultation states that it is building on the 2021 consultation, but that given the changes from the previous proposed scheme, Government deemed it necessary to engage in a further consultation.

Proposed design of the levy, process and enforcement

The consultation document sets out and seeks views on the suggested levy design, including the process for collection of the levy, the rates, and how sanctions and enforcement of the levy will function.

What type of buildings will be covered by the levy?

The most noteworthy change is the extension of the scope of the levy, which will now cover all residential buildings requiring building control approval. This is reflected in Section 58 of the Building Safety Act 2022 (BSA) which received Royal Assent on 28 April 2022. This defines a "relevant building" for the purposes of the levy as a building in England containing "one or more dwellings" or "other accommodation", and expressly states that "accommodation" here "includes temporary accommodation, for example in a hotel or hospital".

Accordingly, as confirmed in the consultation document, the levy may be applied to "any new development considered as "residential", that is any development with a room purpose built for a person to sleep in."

There are various proposed exclusions from the levy, including affordable homes, small...