The Scottish building safety levy: parliamentary approval amid industry concern

On 8 January, the Scottish Parliament held a robust debate and narrowly agreed the general principles of the Building Safety Levy Scotland Bill, with 65 MSPs voting in favour and 54 against.

There has already been much discussion about the form and impact of the Scottish building safety levy (“SBSL”), since the bill was introduced in June 2025.

The SBSL aims to raise £30 million per year to fund improvements to building safety in Scotland, by introducing a new tax on the construction of residential property development in Scotland. This will echo many of the principles of the proposed English building safety levy, which is due to come into effect from 1 October 2026.

While the need for building safety was undisputed, significant concerns were raised at the parliamentary debate about the SBSL’s impact on the housing sector, particularly small and medium-sized developers and rural projects (and the introduction of a new tax on housebuilders at a time when a housing emergency has been declared). Ahead of the debate, the Finance and Public Administration Committee notably did not support the general principles of the bill at stage one (see here), highlighting a “lack of detail on administrative processes and rates” and stressing the need for a “sensitivity analysis” to understand fully how the SBSL might affect development viability, as well as clearer reporting and a sunset provision to prevent a permanent tax burden. There is also the question raised by several MSPs of what effect the SBSL will have on large single-site developments like build to rent, which could face a significant liability (and cash flow hit) without any corresponding capital receipt on sale.

Frustration with the Scottish Government's slow progress was also evident in the debate, with criticisms about the limited number of single building assessments conducted post-Grenfell. There were calls for fairness and a comprehensive “polluter pays” principle that holds all responsible parties accountable, not just developers. Supporters of the bill acknowledged the importance of ensuring costs don’t fall solely on homeowners, however, the debate exposed clear tensions between the urgency of safety requirements and the practical challenges facing housebuilders. Numerous participants called for further detail and amendments to protect the sector before the SBSL is intended to be brought into force, which has already been delayed to 1 April 2028.

We will continue to support the industry bodies engaging with the Scottish Government to deliver a workable and fair levy that raises funds for essential building safety measures in a way that is proportionate, and without impeding the delivery of more homes.

If you would like to discuss anything raised in this article, please get in touch with our Building Safety Group or your usual Burness Paull contact. 

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