Scottish Building Safety Levy: Indicative Rates Published

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The Scottish Government has published the much-anticipated indicative rates for the Scottish Building Safety Levy ("SBSL"), together with a proposed methodology to calculate those rates and an assessment of expected impacts ahead of the SBSL’s planned introduction on 1 April 2028 – see here.

This is the latest development in the SBSL’s progress, following the introduction of the Building Safety Levy (Scotland) Bill in 2025 and parliamentary approval of the legislation earlier this year to result in the Building Safety Levy (Scotland) Act 2026. These earlier stages established the framework for the SBSL but much of the practical detail, particularly around rates and calculation, remained to be determined. See some of our previous articles following the development of the SBSL here and here.

The publication of the indicative rates gives developers and housebuilders a clearer basis for assessing potential SBSL exposure on projects completing from 1 April 2028 onwards (i.e. where there are taxable “building control events”, being the acceptance of a completion certificate or permission for temporary occupation). Although the rates remain indicative and further legislation will be required, they are likely to be a key consideration in appraisals, pricing assumptions and viability assessments for residential projects now in the pipeline. This is particularly the case given there will be no transitional period from April 2028.

By way of reminder, the SBSL is a new devolved tax on the completion of new residential units in Scotland. Its purpose is to secure a contribution from residential property developers towards the Scottish Government’s Cladding Remediation Programme, which is currently estimated to cost between £1.7 billion and £3.1 billion. It is estimated that the total annual revenue raised from the SBSL will be around £30 million per year.

The indicative rates have been set by local authority areas and are intended to give developers more than 20 months’ advance notice of potential liabilities before the SBSL comes into force. In setting the rates, the Scottish Government says it has taken into account factors including average house prices, average home sizes and the estimated number of units developed. 

Two per square metre rates have been published for most local authority areas: a headline greenfield rate and a reduced brownfield rate. The brownfield figures reflect the Scottish Government’s proposed relief for brownfield development at a minimum level of 50%, recognising the higher development costs involved, although the final approach to reliefs and the definition of brownfield land remain subject to further policy detail.

In broad terms the SBSL is to be calculated by multiplying the square metres of chargeable floorspace of a residential unit, by the applicable rate for the local authority where the unit is located. 

The following examples illustrate the spread of indicative rates across selected local authority areas:

It is expected that the rates will be set for three years, although this period is subject to change. The full list of indicative rates for each local authority area is available here ( note there are no rates provided for units constructed in Na h-Eileanan Siar, Orkney and Shetland, which are exempt from the SBSL).

Alongside the indicative rates, the Scottish Government has launched a further technical consultation on outstanding aspects of the SBSL’s operation, see here. This covers matters including the methodology for determining floorspace, possible further exemptions and reliefs, and payment flexibilities for certain development types.

The consultation remains open until 9 October 2026 and will help to inform the final design of the SBSL ahead of its introduction on 1 April 2028. Of particular interest to developers of build-to-rent and purpose-built student accommodation is the proposal to introduce payment flexibilities for completed BTR or PBSA units where a building warrant was granted before 5 June 2025 (the date the Building Safety Levy (Scotland) Bill was introduced). While these developments would remain liable for the SBSL, there would be more time to make payment. This proposal recognises that BTR and PBSA models are based on long-term revenue streams from rents rather than post-completion sales, which other developers could use to pay the SBSL. However, it is not currently proposed to extend this flexibility to BTR and PBSA developments which received building warrants after 5 June 2025. 

There are also proposals aiming to support first-time buyers in purchasing new-build properties, with options for potential full or partial SBSL relief forming part of the consultation. 

Although the Scottish Government has indicated that the consultation is not expected to result in changes to the indicative rates themselves, the remaining detail will matter in practice. The way in which floorspace is measured, reliefs are structured and payment arrangements are framed could materially affect how the SBSL is factored into scheme appraisals, delivery programmes and viability assessments.

For developers and housebuilders, the publication of the rates is a useful step towards greater certainty. However, with the SBSL expected to apply to relevant building control events from 1 April 2028, affected parties should be considering now how the indicative rates and emerging operational detail may affect schemes currently in the pipeline.

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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