Have your say - Scottish building safety levy consultation

The Building Safety Levy (Scotland) Act 2026 received Royal Assent on 13 May 2026, creating the framework for a new devolved Scottish Building Safety Levy (SBSL).

The levy applies to new residential development (with exceptions) and becomes payable on a building control event (generally issue of a completion certificate or certificate of occupation) for a completed unit. Our previous blog provides more detail on what is within scope of the levy and timings involved. The revenue raised will be ring-fenced for the Cladding Remediation Programme.

The tax takes effect from 1 April 2028, but more detailed secondary legislation is needed to govern its operation and administration. The Scottish Government is consulting on the detail. The consultation, which closes on 9 October 2026, splits into six main proposals.

1. Floorspace methodology

The levy is self-assessed, calculated by multiplying a unit's floorspace by the applicable rate. The Scottish government has published indicative rates which have still to be approved by the Scottish Parliament. These rates vary depending on the local authority area in which the development is proposed to take place. The Government proposes adopting the same Gross Internal Area (GIA) approach under the RICS Code of Measuring Practice (6th edition) used by the England-only levy to measure chargeable floorspace, citing cross-border consistency and alignment with existing Scottish building standards methodology.

2. Treatment of communal areas

Scotland's proposals diverge from England here. Communal areas (stairwells, lifts, corridors, entrance halls, atria, and shared resident facilities not functioning as dwellings) would be exempt entirely, since the SBSL is charged per unit rather than per development. England, by contrast, taxes communal areas (subject to proportionate exemption where shared with exempt units).

For purpose-built student accommodation, self-contained and cluster flats would count as taxable residential units, with shared kitchens/bathrooms within those units taxable but shared gyms, study hubs and foyers exempt.

The consultation flags potential effects of excluding communal areas including a proportionately lower tax burden for buildings with more communal space (e.g. apartment blocks) versus standalone houses; support for National Planning Framework 4 compact urban growth objectives; favourable treatment for build-to-rent and student accommodation schemes but at the same time acknowledges BTRs contribution to tackling the housing emergency; and a theoretical (but likely low-value) incentive for developers to over-allocate space to communal areas.

3. Brownfield relief

The 2026 Act requires a relief of at least 50% for units built on brownfield land, reflecting NPF4's brownfield reuse commitments and higher site-preparation costs. This is reflected in the draft rates discussed above. England's equivalent gives a 50% reduced rate for "previously developed" land as defined in its 2025 Regulations.

Scotland has no statutory brownfield definition and the consultation notes that NPF4's planning definition is considered too broad for tax certainty.

The consultation therefore seeks views on a more precise set of criteria, asking whether "brownfield" for levy purposes should include:

• Land on which a building is situated
• "Contaminated land" - land where substances cause or are likely to cause significant harm to people or protected species, or significant pollution of surface waters or groundwater
• Land with large, fixed surface infrastructure such as roads or car parks
• Land previously used for agricultural or forestry purposes
• Land developed for minerals extraction
• Land developed for waste disposal by landfill
• Any other criteria not already captured.

It also asks what percentage relief should apply, noting a rate above 50% would reduce funds available for cladding remediation or shift cost burden to non-brownfield developers.

4. Exempting converted buildings

Under the 2026 Act, new dwellings created by converting a building previously used for a non-residential purpose (e.g. an office, school or church converted into flats) fall within scope of the levy. Where the building was already wholly or partly residential, the levy only applies if the number of dwelling-intended parts changes on completion - e.g. converting a large house into several flats, or several flats into one house, triggers the levy, but converting six flats into six flats does not. This mirrors the UK Government's approach for its own levy.

Any relief for conversions would be considered alongside (i.e. on top of) the proposed 50% brownfield reduction.

On impact: exempting all such conversions would remove roughly 4% of the tax base (though the real impact may be smaller, as some units may already qualify for other exemptions), with most conversions being non-domestic-to-residential rather than sub-divisions of existing homes. These conversions are concentrated in City of Edinburgh, Aberdeen City, Aberdeenshire, Fife and Dundee City.

5. Payment flexibility for BTR and PBSA

Having now published indicative rates for the levy (still to be approved by the Scottish Parliament), the Scottish Government states that most developers have over 20 months' notice before the levy takes effect. However, they also acknowledge that a small number of build-to-rent (BTR) and purpose-built student accommodation (PBSA) schemes started construction before the primary legislation was introduced in June 2025 and will complete after the levy takes effect.

BTR and PBSA developments, unlike their build to sell housing counterparts rely on long term rental income rather than sale proceeds. The Scottish Government proposes payment flexibility for qualifying BTR and PBSA units i.e. units for which a building warrant granted before 5 June 2025. Payment of the SBSL for such properties could be spread over up to three years on a schedule agreed with Revenue Scotland, with interest still accruing.

This proposal may be welcomed by developers qualifying for the extended payment period but it leaves all other BTR and PBSA developments which will be completed after the SBLS comes into effect with a large tax bill at the point of completion. With the consultation noting that BTR is a key priority for tackling the housing emergency and acknowledging that favourable tax treatment may protect and promote investment in this sector, there may be calls for wider availability for payment flexibility.

6. Support for first-time buyers

Sitting within the Housing to 2040 agenda, this proposal would let developers claim relief on units sold to first-time buyers, using a definition consistent with Land and Buildings Transaction Tax First-Time Buyer Relief and require that:

• The property is a new residential unit;
• The buyer has never previously owned a residential property anywhere in the world;
• The buyer intends to occupy it as their only or main residence;
• The transaction is not a linked transaction (subject to the LBTT FTBR exception); and
• The transaction is not one to which the Additional Dwelling Supplement applies.

Where a property is bought jointly, LBTT FTBR (and by extension this proposed relief) would only apply if all purchasers are first-time buyers.

Practical concerns on implementing this relief include the buyer's identity typically being unknown until after the levy falls due, the relief's inapplicability to BTR/PBSA developers, and the verification burden on Revenue Scotland. The consultation seeks views on whether to introduce a full or partial relief, appropriate conditions, acceptable evidence, whether it would genuinely benefit first-time buyers, and alternative support mechanisms.

Next steps

The consultation closes on 9 October 2026. Responses will be analysed alongside other evidence, with an analysis report to follow before the Government finalises the secondary legislation determining the SBSL's actual scope and cost impact on individual projects. Click here to link to the Consultation.