Brownfield jobs to face smaller building-safety levy

Housing projects on brownfield sites are set to face reduced charges under the new building-safety levy.

The levy, introduced as part of the Building Safety Act earlier this year, would be charged on nearly all new residential buildings in the UK. But housing projects on brownfield sites would face smaller levies, in a bid to encourage development work on this category of sites.

Under the plans, released today for consultation, most new residential buildings would be subject to a levy as part of building control, with developers expected to pay the tax to local authorities.

Failure to pay the levy would see the building project delayed.

Smaller projects of up to 10 units would be exempted from the levy, in a bid to protect small firms, the government said.

The levy was introduced as a way to pay for cladding remediation on buildings for which the developer cannot be traced.

It is expected to raise an estimated £3bn over 10 years, and will be targeted at the remediation on buildings of 11-18 metres in height.

The separate £5.1bn Building Safety Fund, provided from general government resources, will be used to remediate buildings taller than 18 metres.

The size of the levy rates will also vary, depending on the location of the site. For instance, the levy will be adjusted down where house prices are lower.

Affordable housing will also be exempted from the levy, as part of a plan to further boost the development of affordable housing in the UK.

NHS facilities, including GP surgeries and hospital sites, children’s homes and new refuges for people including victims of domestic abuse, will also be exempted.

Building-safety minister Lee Rowley said: “By having these plans in place, we can ensure that all leaseholders are protected, regardless of whether their developer has pledged to remediate or not.”

But a spokesperson for the Home Builders Federation (HBF) said the plan had “serious implications for home ownership, investment and jobs”.

“In the midst of a recession, it is disappointing for [the] government to create more barriers to investment with a move that will further threaten supply, in particular of affordable homes,” they added.

“Building new homes may not be politically attractive but the country faces an acute housing-affordability crisis and the construction of new homes supports millions of British jobs.”

Developers and other organisations may respond to the consultation here. The consultation will close on 7 February 2023.

The sector has also yet to sign a contract covering the remediation of buildings of between 11-18 metres in height where ownership has been established. In August, the HBF – the key body representing developers in discussions with the government – said the document was not in a “form where developers can reasonably sign it”.

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