From 1 April 2028 the Scottish Building Safety Levy (the Levy) will be charged on completion of new residential units in Scotland. This forms part of the Scottish Government’s Cladding Remediation Programme and Levy proceeds must be used to remediate unsafe external wall cladding systems.

Published: 7 August 2026
Authors: Lewis Ritchie

The underlying legislation (the Building Safety Levy (Scotland) Act 2026) was passed by the Scottish Parliament in March 2026 and the Scottish Government has recently published two significant updates:

• indicative levy rates and
• a technical consultation on outstanding aspects of operating the Levy.

This is relevant for PBSA, BTR and traditional models of residential development and will affect projects already in the pipeline. The key points of the updates are set out below and more detail on the Levy is available in our article here.

Indicative rates

• a bespoke rate of tax has been set for each local authority area to reflect average house prices, home sizes and the estimated number of units in that area. However, the rates have been calculated so that they equate to the same percentage of the average house price per metre in each local authority
• for greenfield sites the rates range from £23.17 per square metre in Dumfries and Galloway to £48.46 in Edinburgh
• brownfield sites will benefit from a minimum 50% relief and the indicative rates reflect the headline rate minus 50%. For example, £11.58 for Dumfries and Galloway and £24.23 for Edinburgh
• the Scottish Government will report on the Levy’s operation every three years
• the rates are not yet final (and will require approval from the Scottish Parliament and implementing regulations before taking effect) but it is hoped that they will assist cost planning for developments due to complete after 1 April 2028.

The consultation asks:

• how chargeable floorspace should be measured. The proposal is to use Gross Internal Area as set out in the RICS Code of Measuring Practice 6^th Edition (this is consistent with the equivalent levy for England)

• how communal areas of a building should be treated e.g. shared entrances, stairs and facilities such as gyms and residents’ lounges. The proposal is that such areas would not be chargeable.
  
  The Scottish Government hopes that this approach, which contrasts with that for the English levy, will incentivise high-density development and BTR and PBSA projects which typically have more areas of communal space. For PBSA it is worth noting that the communal entrance/stairs and facilities (e.g. study hubs, laundry) for use by all the building’s residents would not be chargeable but the shared kitchen and bathroom facilities within the residential unit of each cluster flat would form part of the taxable space.

• how brownfield land should be defined. There is no statutory definition of “brownfield” in Scotland.The consultation considers the term used for planning purposes in NP4 as lacking clarity for a tax context and asks whether the following should be considered:

  • where a building is situated on the land
  • whether the land falls within the legal definition of “contaminated land”
  • whether the land has large, fixed surface infrastructure, such as roads or car parks
  • whether the land was used for agricultural or forestry purposes (including being occupied by agricultural or forestry buildings)
  • whether the land was developed for minerals extraction; and
  • whether the land has been developed for waste disposal by landfill.

• whether the brownfield rate of relief be higher than 50%.

• whether relief or exemption should be applied to conversions of existing buildings and if so, whether this should cover non-residential buildings, residential buildings or both.

• in response to industry concerns about the Levy’s impact on cash-flow for BTR and PBSA developments (where all/a number of units are completed and will trigger a charge at the same time), the consultation asks if such sites with building warrants granted before 5 June 2025 (when the legislation was introduced to the Scottish Parliament) should be given the option to pay over an extended period of up to three years.

• whether full or partial relief should be given to the developer where a completed home is sold to a first-time buyer and if so, the conditions to be met

Looking ahead

The consultation closes on 9 October 2026 and secondary legislation will follow. Please do get in touch if you would like more information in the meantime.