From 1 April 2028 the Scottish Building Safety Levy (the Levy) will be charged on completion of new residential units in Scotland.

The Levy is part of the Scottish Government’s Cladding Remediation Programme and proceeds must be used to remediate unsafe external wall cladding systems.

Published: 18 February 2026
Last updated: 24 March 2026
Author: Lewis Ritchie

The legislation creating the Levy - the Building Safety Levy (Scotland) Bill (the Bill) – was passed by the Scottish Parliament on 17 March 2026. More detail (including levy rates, penalties, reliefs) will be set out in secondary legislation however the key points to note at this stage are:

• this is the Scottish equivalent of the levy which will apply to developments in England from 1 October 2026.
• there are no transitional arrangements meaning that residential units in progress - but not complete - before 1 April 2008 will be subject to the Levy
• the Scottish Government has committed to publishing indicative rates in June 2026 to give developers some certainty around their levy liabilities
• there are some exemptions: for affordable and social housing and new residential units constructed on Scottish islands
• Build-to-rent (BTR) and purpose-built-student accommodation (PBSA) properties are specifically included. However, in response to industry concerns about the Levy’s impact on cash-flow for such developments (where all/a number of units are completed and will trigger a charge at the same time), the government has indicated that it will explore temporary payment flexibilities for BTR and PBSA developments in the first few years of the Levy
• secondary legislation will provide for reliefs: including 50% relief for developments on brownfield land and we expect, from what the government has said, first-time buyer relief. Additionally, the government intends to consider relief for conversions including listed buildings
• on a practical level, the Levy will be collected by Revenue Scotland (compared with local authority collection for developments in England)
• the Bill as passed is available here and more detail is set out below.

Liability

The person liable to pay the Levy is the building owner at the time of either:

• submission of a completion certificate to the verifier, or
• application for the grant of temporary occupation.

This shifts the financial burden from homeowners to residential developers, making it an additional cost to factor into new residential projects. While this aligns with broader policy objectives, it does introduce a new viability consideration for developers.

When will the Levy be due and how will it be calculated?

The Levy becomes due when a completion certificate is accepted or temporary occupation permission is granted. The Bill provides for payments to be calculated in the accounting periods for a financial year - ending on 31 March unless otherwise set by Scottish Ministers - and to take into account the developer’s annual levy-free allowance of 29 units and applicable reliefs.

The Levy will be calculated using the floorspace of the unit (measured in square metres) and applying the relevant Levy rate (when known) to the floorspace area.

During the consultation process, several methods for calculation were proposed, including using a percentage of the market value of the property and implementing a flat rate levy. While a flat rate would have offered certainty, it may have been counterproductive by potentially deterring the development of smaller, more affordable homes.

Properties included

The Levy applies to new units that are used or are "intended to be used as a dwelling or other accommodation". Of note is that the Bill specifically includes residential accommodation for students and for occupation by tenants. Hotels are not included.

Exemptions

To ensure that that Levy does not exacerbate the challenges to disadvantaged housing sectors, not all residential development will be subject to the Levy including:

• Affordable housing: Consistent with its commitment to building 110,000 affordable homes by 2032, housing delivered through the Scottish Government’s affordable housing supply programme will be exempt from the Levy
• Social housing: Housing to be let under a secure tenancy by any party such as a local authority, registered social landlord or private developer will also be exempt and
• units constructed on Scottish islands.

Reliefs

Secondary legislation will provide for reliefs: including 50% relief for developments on brownfield land and we expect, from what the government has said, first-time buyer relief. Additionally, the government intends to consider relief for conversions including listed buildings.

Penalties

Penalties will apply: for failure to make a return, pay the Levy and failure to register for the Levy. Enforcement is not expected to go so far as to withhold or reject a completion certificate because of non-compliance.

For how long will the Levy apply?

The Levy will apply to new units completed from and including 1 April 2028. Despite concerns raised during the legislative process there is no fixed end date for the Levy – instead the Scottish Ministers are obliged to report every three years on how the proceeds of the Levy have been used and on the work funded by it.

Looking ahead

Indicative rates will be published in June 2026 and we are expecting a consultation on secondary legislation later this year. Please do get in touch if you would like more information in the meantime.