Building firms facing ‘cladding tax’ to boost safety – Daily Business

Some new-build properties in Scotland could be hit with a new “cladding tax” to improve building safety and pay for a programme of repairs.

The Building Safety Levy (Scotland) Bill would be applied in line with equivalent legislation in England. 

It 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 £1.7 billion over a 15-year period. 

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.”

Background 

The UK Government agreed in principle to devolve the powers needed for a Scottish Building Safety Levy last year. Powers secured to introduce building safety levy – gov.scot (www.gov.scot) 

The legislation – which is proposed to come into effect in April 2027 – includes provisions to exempt certain types of development, including social and affordable housing.

It follows the Grenfell tower blaze in London in 2017 in which exterior cladding material was believed to have contributed to the spread of the fire, killing 72 people.

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 our cladding remediation work.  

Estimated costs for the Scottish Government’s cladding remediation programme have also been published: Cladding remediation: capital spend forecasting – gov.scot