Building Safety Levy: Key Changes Developers Need to Know Before October 2026

What is the definition of Previously Developed Land under the Building Safety Levy?

 

The Building Safety Levy notes that chargeable developments constructed on Previously Developed Land (PDL) will continue to be charged using a 50% discounted levy rate, to reflect the often-higher costs of developing this type of land.

 

The amendment seeks to clarify the definition of PDL, so that this better aligns with the definition of the NPPF and confirms:

 

• Chargeable development where planning permission is granted through Permitted Development Rights will be charged using the PDL discounted rates;
• PDL is defined as land which either has a building on it or had a building on it at any point on or after 1^st July 1948. However, land is not PDL if: 
  • The building on the land is wholly underground
  • The building on the land is used for agriculture or forestry
  • The building that was most recently on the land was used for agriculture or forestry,
  • The land has been developed for minerals extraction
  • The land has been developed for waste disposal by landfill, or
  • Any operations carried out in, on, over or under the land are not lawful (within the meaning of section 191 of the Town and Country Planning Act 1990)

A standard definition of ‘building’ has also been included as a ‘structure or erection’ which may include hardstanding areas.

 

In order to qualify for PDL at least 75% of the land within the redline boundary of the development (as specified by the planning permission) in which the works are being constructed must meet the definition of PDL set out above.

 

The Note acknowledges that whilst this amendment may take longer to prove the status of areas of land, this should reduce administration costs, given that the definition would align more closely with how the NPPF operates in practice.

 

Will medium-sized developments be exempt from the Building Safety Levy?

 

The Government’s consultation on the proposed changes to the NPPF earlier this year, included questions about whether the Building Safety Levy exemption should be extended to include sites of fewer than 50 dwellings or 120 PBSA bedspaces (i.e. medium sites).

 

This proposal was widely supported by DHA as part of our consultation response, on the basis that this would help to support the viability and therefore delivery, of small medium sites, helping to meet the Government’s housing objectives.

 

Whilst the Memorandum similarly notes that respondents supported the extension of the exemption “as a proportionate way to reduce burdens on smaller schemes and support SME housing developers” others raised concerns about potential behavioural effects which may impact levy receipts.

 

As a result of this, the Memorandum confirms that the Government will unfortunately not be taking forward the extended exemption threshold at this stage. It does however suggest that the Government will keep this decision under review.

 

On this basis, we understand that the Building Safety Levy will continue to apply for major residential development i.e. 10 or more dwellings or 30 PBSA bedspaces.

 

What does this mean for developers?

 

The latest amendments provide greater certainty over how the Building Safety Levy will operate from October 2026.

 

Developers should pay particular attention to the revised definition of Previously Developed Land and note that the proposed exemption for medium-sized developments has not been taken forward.

 

For schemes currently progressing through planning, early consideration of the Building Safety Levy will be important when assessing development viability and project costs.

 

Further Reading

 

If you would like to understand the wider background to the Building Safety Levy, including how it will operate and who it applies to, read our Building Safety Levy – July 2025 Update.