Developers in Scotland will have to pay towards the cost of remediating dangerous buildings under proposals to be considered by the country’s parliament.
Powers have now been secured by the Scottish government to introduce a charge equivalent to the Building Safety Levy, which is expected to contribute £3bn over the next 10 years to the cost of fixing unsafe cladding in England.
The tax proposed north of the border would apply to the construction of new residential buildings, mirroring measures being introduced in England through the Building Safety Act.
Funds raised through the levy would be used to support the Scottish government’s cladding remediation programme.
The measure is part of the Cladding Remediation Bill, which the Scottish Government pledged last year to include in its 2023/24 legislative programme to speed up the repair of dangerous buildings.
Because the Scottish parliament cannot legislate for the introduction of a new national tax, it had to seek the transfer of powers from the UK parliament to bring in the levy.
The plan was given the go-ahead after a joint UK/Scottish government consultation earlier this year found no evidence that would prevent the devolved powers being granted.
Deputy first minister and finance secretary Shona Robison said the Scottish Government was determined to safeguard people living in buildings with unsafe cladding.
“I know that developers share this determination and have made significant progress to date,” she said on Friday (19 April).
“However, it is clear more needs to be done and these powers will ensure that developers make a fair contribution to address building safety defects in Scotland, just as the UK Government is asking them to do in England.”
She welcomed Westminster’s “collaborative approach” on the issue, adding: “It is important that we also continue working side by side with developers.”
The Chartered Institute of Building (CIOB) in Scotland backed the introduction of a Scottish levy to be operated by the country’s government, which it said should undertake “meaningful engagement” with the construction sector.
Jocelyne Fleming, policy and public affairs officer for the CIOB in Scotland, said: “This decision could lead to a much-needed new system to ensure appropriate funds are raised to support the country’s cladding remediation programme and will allow buildings in Scotland to take priority.
“It is, however, vital that careful consideration is given to how such a levy will impact SMEs and what measures can be put in place to ensure the levy costs are not passed onto consumers.”
Further concerns over the design of the scheme were raised during the consultation period.
Some respondents said that the introduction of a Scottish levy risked creating additional complexity and an administrative burden for housebuilders if the rate differed from that set in England.
There were also warnings that developers could face “double taxation” as they already contributed to the Residential Property Developer Tax (RPDT) and, in some cases, had committed to pick up the bill for the remediation of the buildings for which they were responsible.
The RPDT applies to companies or groups of companies undertaking residential property development in the UK.
