The levy will partly fund the cladding remediation programme in Scotland, which is estimated to cost £1.7 billion over a 15-year period. 

Public finance minister Ivan McKee MSP confirmed that the new implementation date is now 1 April 2028, instead of April 2027.

Mr McKee also announced a commitment to publish indicative rates after the 2026 Scottish Parliament election.

The decision comes after industry representatives provided evidence to the Finance and Public Administration Committee last week, warning it could worsen Scotland’s housing emergency rather than resolve it.

Miller Homes revealed it has already scaled back construction in Scotland, with output falling from around 25% of its UK total in 2019 to “well under 14%”.

Trade body Homes for Scotland (HFS) also questioned the government’s financial modelling, which predicts the levy will raise £30 million annually. HFS argued ministers had overstated the size of the new-build market, assuming it was worth £4.6bn when Registers of Scotland data put it closer to £3.2bn.

Responding to the announcement, Josie Sclater, senior policy officer at the Scottish Property Federation (SPF), said the delay should give the construction sector more time to prepare for the practical impact that the introduction of the SBSL will bring.

“We highlighted the practical challenges faced by developers and the wider property sector, including the risk to development viability at a time of a national housing emergency,” Ms Sclater added.

“Public finance minister Ivan McKee MSP confirmed that the delay would give the industry ‘appropriate lead-in time’ to prepare, although it was also stated that - with the revised date - there will be no transitionary arrangements. This means that developments receiving their completion certificate on or after 1 April 2028 will be liable to pay the levy.

“While the postponement provides some breathing room for developers and investors to prepare, uncertainty around the final levy rates remains. Indicative rates are not expected to be published until June 2026, which will continue to influence investment decisions in the sector.”