With ‘More Homes Scotland’ announced on 22 January, the Scottish Government will need to avoid introducing legislation that would be a barrier to the delivery of new homes. With the Building Safety Levy (Scotland) Bill having passed Stage 1 of the Scottish Parliament’s legislative process on 8 January 2026, Propertymark continues to highlight that introducing an additional blanket charge on new builds would undermine efforts to address what First Minister called “a housing emergency” in (last week’s) announcement.
The proposed levy would be a devolved tax paid by Scottish developers of newly built residential properties and mirrors the UK Government’s Building Safety Levy for England, which was introduced in response to the Grenfell Tower fire in 2017.
During Stage 1 of the Bill, Ivan McKee, Scotland’s Minister for Public Finance, stated that Grenfell “highlighted the need to tackle unsafe cladding throughout the UK” and added that the funding raised would be “vital” in delivering the cladding remediation programme.
To allow the construction industry time to prepare, the Scottish Government has confirmed that the levy would be introduced from April 2028, subject to the Bill receiving parliamentary approval.
The levy is expected to raise between £360 million and £450 million over 15 years to fund Scotland’s Cladding Remediation Programme, which aims to complete essential remedial works on residential buildings over 11 metres in height.
Developers would be required to pay the levy when constructing new homes, based on the size of the floorspace of the new dwelling. There will be some exemptions for social housing, affordable homes, all buildings on Scottish islands and pre-existing residences where there is no change to the number of residential units. Following the submission of a detailed response to the Scottish Parliament’s Finance and Public Administration Committee, Propertymark reiterated its support for improving building safety but warned that unfairly charging developers risks exacerbating Scotland’s ongoing housing emergency.
Risk of undermining housing supply during a housing emergency
Recent analysis shows that there are fewer properties available to rent in 14 Scottish local authority areas compared with 2022, despite the introduction of rent controls. The Highlands has been the worst-affected rural council, with 1,000 fewer homes listed for rent, while Argyll and Bute saw a 24 per cent reduction in rental properties since 2024. While efforts to build new homes are very welcome, the money raised by the levy could directly be used to fund the delivery of new homes.
Propertymark has also cautioned that applying a blanket levy to all developers, including those with no history of installing unsafe cladding, fails to hold those who were responsible for the cladding crisis to account.
Since the levy doesn’t account for the size of the developer, many small- to medium-sized developers are less able to absorb additional costs, thus are likely to be disproportionately impacted when compared to larger scale companies.
To accelerate remediation efforts, Propertymark argues that the levy should instead be targeted at those responsible for installing unsafe cladding. This approach would prevent the entire sector from being penalised which will impede efforts to accelerate house building, and ensure affected residents receive support more quickly. Where a solvent building owner or developer cannot be identified, other responsible parties, such as manufacturers or contractors involved in the cladding supply chain, or the Scottish Government should contribute to remediation costs.
Additional proposals from the property professional body include a building-specific fine applied to those responsible for installing flammable cladding, which could be lifted once remediation is completed to an appropriate standard.
Propertymark’s Housing (Cladding Remediation) (Scotland) Act 2024 fact sheet provides members with an overview of current cladding legislation.
To access Propertymark’s fact sheets and learn more about the benefits of membership, visit: https://www.propertymark.co.uk/membership/join.htmlScottish
