The Building Safety Levy (the Levy) is set to come into force on 1 October 2026. With fewer than three months to go, Government laid draft amending regulations on 2 July which make a number of important changes — most notably to the type of land which can benefit from a discounted levy rate.

This article explains what has changed, and what developers and stakeholders in the real estate sector need to do next. For background on how the Levy works, including rates, scope, exemptions and the collection process, please refer to our previous articles on the Building Safety Levy:

UK Building Safety Levy explained: what developers need to know before October 2026

Building Safety Levy: start date postponed until autumn 2026

What is "previously developed land", and why does it matter for the Levy?

Developments on previously developed land (PDL) benefit from a 50% discount on the applicable Levy rate, provided at least 75% of the consented site qualifies as PDL. The discount reflects the typically higher costs associated with developing brownfield land.

Broadly, land will qualify as PDL if it has a "building" situated on it (or has had a building situated on it at any time since 1 July 1948).  However, since publication of the original regulations, concerns were raised that the existing definition of PDL created uncertainty about whether certain types of land, particularly hardstanding areas, fell within scope.

Following lobbying by this firm, Real Estate: UK and others about these concerns, Government has now responded with an updated definition. Getting this right matters. For many urban and suburban developments, the difference between qualifying for the PDL discount and paying the full rate could be significant.

What has changed?

The Building Safety Levy (Amendment) (England) Regulations 2026 address three main areas within the PDL definition, alongside a number of technical amendments to the wider levy framework.

New standalone definition of "building"

The regulations replace the previous definition of "building" (which cross-referred to planning legislation) with a new, self-contained definition. The term "building" now encompasses not just permanent buildings, but also any other permanent man-made structure or erection. Importantly this may include areas which are reinforced for load-bearing, paved, or otherwise surfaced with man-made materials, such as hardstanding. Plant and machinery can also come within the definition of a structure or erection, if permanent.

This clarification is welcome. It means that sites featuring substantial hardstanding — such as former car parks, industrial yards or storage areas, as well as roads, loading bays, airport runways and drainage — may count as PDL for the purposes of the 50% discount, provided the other qualifying criteria are met.

Underground development excluded

Buildings that are wholly underground are now excluded from the definition of PDL. Additionally, underground parts of buildings are excluded from the 75% land coverage calculation.

The Government's rationale is that including underground development could overextend the scope of the policy — for example, capturing open fields with buried pipes — or complicate evidence-gathering and the review process. These changes are intended to align the levy definition more closely with how the PDL concept operates in practice under the National Planning Policy Framework (NPPF).

Unlawful development disregarded

The Regulations introduce an important proviso to the availability of the PDL exemption. A site will not qualify for PDL if any operations which have been carried out in, on, over or under the land are not lawful. "Operations" is not defined in the building safety levy regulations, but Government's intention appears to be to capture situations where the physical development on the land was unlawful (as opposed to say unlawful use). The Government guidance promises that a range of evidence can be used to demonstrate lawfulness, including not just planning documentation but also historic or visual records, operational data and factual statements. However, it does not address the concept of "operations" itself. It is to be hoped that in attempting to amend the original levy regulations to reduce uncertainty, Government has not introduced a different type of uncertainty by the back door. If there are question marks over the lawfulness of operations at a site then the availability of the PDL exemption will need to be carefully considered, which could make all the difference between a site being viable and not.

Technical amendments

Alongside the PDL changes, the amending regulations introduce a number of technical updates to the levy framework:

  • Earlier spot check notification deadline. The collecting authority must now notify developers of a levy information spot check at an earlier stage.
  • Aligned information requirements. Information requirements for levy update notices have been brought into closer alignment with those applicable to building control applications and variations, ensuring consistency across the process.
  • Cancellation of notices where no charge applies. The regulations now clarify that levy liability notices and levy payment certificates are cancelled where there is no longer any levy chargeability.
  • Minor correcting amendments have also been made.

Medium sites exemption: not happening — for now

As part of the recent consultation on proposed changes to the NPPF, the Government consulted on whether to extend the existing small sites exemption (which currently excludes developments of fewer than 10 units from the levy) to medium-sized sites (10-49 units); however the announcement confirms that Ministers have decided not to extend the exemption at this time.

What happens next?

The amending regulations were laid on 2 July 2026 and will need to be debated in both Houses of Parliament, with dates yet to be announced. They are intended to come into force alongside the Levy itself on 1 October 2026.

Updated Government guidance has been published to reflect the changes and can be accessed on GOV.UK.

What should developers and stakeholders be doing now?

With the 1 October 2026 go-live date now firmly in view, developers, landowners and investors across the real estate sector should be taking active steps to prepare:

  • Review your pipeline. Building control applications submitted before 1 October 2026 — provided they are not later rejected — will not be subject to the Levy. However, if works have not reached the requisite stage within three years, the application may lapse, so submitting early will not preserve the position indefinitely.
  • Assess PDL status. The revised definition provides greater certainty, but developers should review their sites carefully — particularly those with hardstanding or underground structures — to determine whether they qualify for the 50% discount under the updated criteria.
  • Factor the Levy into financial models. The Levy charge is calculated relatively late in the development cycle, and the rate is subject to review every three years. This can create challenges for deal structuring and pricing, particularly for developments spanning a review period.
  • Ensure your processes are ready. Information must be supplied with building control applications and commencement notices, even where a development is expected to be exempt. Failure to provide levy information is grounds for rejection of a building control application.

How we can help

The Building Safety Levy adds a meaningful new cost to residential and mixed-use development in England. With the amending regulations now laid and the implementation date approaching, there is a limited window to prepare.

If you would like tailored advice on how the Levy will affect your projects, please contact Jessica Tresham, Gemma Whittaker, Elayna Rattenbury, or Julia Dacre Field.