If passed, the Building Safety Levy (Scotland) Bill will see a tax charged on the construction of certain new residential properties, in line with equivalent legislation in England. 

The Bill seeks to raise around £30 million per year to help fund work to fix residential buildings with unsafe cladding which have no linked developer.

Latest estimates indicate that the Scottish Government’s Cladding Remediation Programme could cost between £1.7 billion and £3.1bn over a 15-year period.

The Bill proposes several explicit exemptions, notably including affordable and social housing developed through the Scottish Government’s Affordable Housing Supply Programme.

Other exempt development types include:

• NHS facilities, care homes, supported housing.
• Conversion/refurbishment of existing owner-occupied homes.
• Homeless shelters, refuges, religious accommodation, schools, hospitality, military, health, education, justice and treatment centres

Small-scale developer exemptions are also proposed, with specific thresholds yet to be determined and safeguards being considered to avoid abuse through splitting projects.

Public finance minister Ivan McKee said: “The Scottish Government is committed to doing what is right and necessary to address the challenge of fixing buildings affected by unsafe cladding.

“That includes putting the appropriate funding arrangements in place to ensure that the associated costs of cladding remediation do not fall directly onto affected homeowners.

“I know that developers share our determination to keep people safe and this levy will ensure they make a fair contribution to these costs, just as they will be doing in England.

“I also welcome the continued cooperation of developers who have accepted responsibility for the assessments and any required mitigation and remediation of their buildings.”

The UK Government agreed in principle to devolve the powers needed for a Scottish Building Safety Levy last year.

The legislation is proposed to come into effect in April 2027. Details of tax rates will be set out in regulations if MSPs approve the Bill, consistent with the arrangements for other devolved taxes.

The Bill sets out a provision for a regular review period for the levy, which will be an opportunity to consider the revenue target in light of the prevailing housing market and wider economic conditions, as well as the emerging position on the scale and profile of spending on cladding remediation work.