The Building Safety Levy (Scotland) Act 2026 introduces a significant new cost consideration for residential developers and housebuilders operating in Scotland. Following the Act’s passing in May 2026, the Scottish Government has now published indicative rates ahead of the Scottish Building Safety Levy (“SBSL”) coming into effect on 1 April 2028.
We previously outlined the key proposals contained in the Bill when it was introduced to the Scottish Parliament in June 2025. With the legislation now enacted and indicative rates confirmed, developers can begin assessing the potential impact of the SBSL on current and future projects.
What is the Scottish Business Safety Levy (SBSL)?
The SBSL is a new tax on the construction or conversion of certain residential property developments. The levy is expected to raise around £30 million annually to contribute towards the Scottish Government’s Cladding Remediation Programme, which is estimated to cost £1.7 – £3.1 billion.
The Act is intended to be a temporary measure – with it being due to expire 15 years after coming into force (albeit there is scope within the Act for this period to be extended).
What are the rates?
As noted, the Scottish Government has now published indicative rates for the SBSL. While fixed rates require to be confirmed in secondary legislation, the indicative rates have been provided to allow housebuilders to begin to ascertain their potential liability for their developments.
The indicative rates for reach local authority area are set out below:
Local Authority Area |
Greenfield |
Brownfield |
| Aberdeen City | £36.16 | £18.08 |
| Aberdeenshire | £24.23 | £12.11 |
| Angus | £26.96 | £13.48 |
| Argyll and Bute | £24.34 | £12.17 |
| City of Edinburgh | £48.46 | £24.23 |
| Clackmannanshire | £27.62 | £13.81 |
| Dumfries and Galloway | £23.17 | £11.58 |
| Dundee City | £29.39 | £14.70 |
| East Ayrshire | £24.30 | £12.15 |
| East Dunbartonshire | £39.19 | £19.60 |
| East Lothian | £34.82 | £17.41 |
| East Renfrewshire | £36.88 | £18.44 |
| Falkirk | £28.90 | £14.45 |
| Fife | £29.93 | £14.96 |
| Glasgow City | £38.04 | £19.02 |
| Highland | £27.46 | £13.73 |
| Inverclyde | £30.92 | £15.46 |
| Midlothian | £36.05 | £18.02 |
| Moray | £23.25 | £11.63 |
| North Ayrshire | £27.04 | £13.52 |
| North Lanarkshire | £29.46 | £14.73 |
| Perth and Kinross | £26.67 | £13.33 |
| Renfrewshire | £32.33 | £16.17 |
| Scottish Borders | £24.77 | £12.39 |
| South Ayrshire | £29.63 | £14.81 |
| South Lanarkshire | £28.46 | £14.23 |
| Stirling | £28.59 | £14.29 |
| West Dunbartonshire | £30.64 | £15.32 |
| West Lothian | £33.06 | £16.53 |
A rate has been set for each local authority, with the exception of the island authorities, which are exempt from the SBSL. These rates are shown in column 2 of the table. The variation in rates across local authorities is said to be reflective of average house prices across Scotland.
The Act also introduced a mandatory relief of not less than 50% to be applied to units constructed or converted on brownfield land. Accordingly, column 3 of the table shows what the minimum 50% relief for brownfield land may be at the indicative rates.
How is the SBSL calculated?
The Act sets out the steps for calculating the SBSL liability. In brief, the chargeable floorspace (measured in square metres and based on the Gross Internal Area of the unit) is multiplied by the applicable rate for the local authority area in which the unit is located (noting that SBSL free allowances and other exemptions may apply).
Who is liable to pay the SBSL?
The publication of indicative rates is particularly significant given that calls to delay implementation of the SBSL were ultimately rejected.
Prior to the Bill becoming law, amendments were proposed which would have prevented the levy from applying where either: (i) construction or conversions works had commenced before, or (ii) an application for a building warrant had been made on or before, 1 April 2028. The rationale being that unknown rates of tax to be applied and indeed the dates from which they would apply is destabilising for a market which needs certainty to plan and make decisions for the long term. However, these calls were rejected. Instead, it was noted that publication of indicative rates would provide housebuilders sufficient advance notice, while still allowing funding to begin towards the cladding remediation programme.
As a result, it is likely that a number of housebuilders will already be committed to (or even on site for) projects that will fall within the remit of the SBSL. The levy will generally be payable by the developer following the earlier of (a) the issue of a completion certificate, and (b) permission for temporary occupation being granted, for a relevant plot.
Key considerations for developers
While the levy-free allowance for the first 29 units constructed by a developer brings some relief, particularly for SME housebuilders, developers should be assessing the potential impact of the SBSL, and considering available mitigations strategies now. Housebuilders and developers should ensure that potential levy liabilities are being considered in all development appraisals, site acquisitions and project structuring decisions, particularly where schemes are expected to be delivered after the commencement date. Early analysis may help identify opportunities to mitigate costs and avoid unexpected impacts on project viability.
Resources
The Scottish Government has launched a technical consultation, seeking views on a number of outstanding policy matters. While it has indicated it does not anticipate revising the SBSL rates as a result of the consultation), stakeholders may wish to consider responding and contributing to the development of the final regime: Scottish Building Safety Levy: technical consultation – gov.scot.
If you would like advice on how the Scottish Building Safety Levy may affect your developments, please contact our Housebuilding Team.
