One of the updates published by the Scottish Government announced that indicative rates have been set for the levy. 

The other update marked the publication of a technical consultation concerning the methodology in calculating floorspace, the possibility of additional exemptions and reliefs which include options for flexibilities in payment. But it is not anticipated that this will lead to the rates being adjusted. 

In response to the updates, David Melhuish, director of Real Estate:Scotland, said: “The publication of the indicative rates for the Scottish Building Safety Levy, to be based on floorspace and per local authority, will now give developers and investors much-needed clarity on the tax owed on residential developments completed on or after 1 April 2028.

“Recognition of the role of purpose-built student accommodation and build-to-rent in tackling Scotland’s housing emergency is also welcome, as is the potential to exclude communal space and provide a 50% discount for brownfield land in the latest consultation.

“Whilst these were key issues that we engaged with the Scottish Government on, we remain disappointed that the transitional provisions do not go far enough for developments already on site and commenced before developers were even aware of the levy.”

Melhuish said fixing unsafe cladding “is an immediate priority” but added that the body understands that the Scottish Government needs to secure the funding needed to tackle it.

Melhuish commented: “The challenge is not the need to tackle unsafe cladding but ensuring that the way it is funded does not undermine the delivery of the homes Scotland urgently needs.”

Melhuish also said that a worsening challenge is the cost of new housing delivery. Melhuish added: “[R]ising construction costs, regulatory requirements and existing remediation obligations [are] already placing significant pressure on development economics.

“This could be particularly acute for new Build-to-Rent developments where the levy liability will arise at one point in time, rather than spread over a longer period of time as is often the case with many traditional private for-sale developments.”