UK delays cladding tax for new homes until 2026

The UK government has delayed a tax meant to fund the removal of unsafe cladding from new homes. The Building Safety Levy was supposed to start this year but will now begin in autumn 2026. This decision follows concerns from developers that the tax could hinder the government’s goal of building 1.5 million homes by 2030. Housing Minister Matthew Pennycook maintains that the government is committed to the tax. He emphasized that the delay won't slow down efforts to improve building safety. He acknowledged the challenges inherited from previous administrations and the need to expedite safety improvements. Neil Jefferson, chief executive of the Home Builders Federation, welcomed the delay. He argued that the tax could raise the cost of new homes significantly, jeopardizing housing supply. Jefferson suggested scrapping the tax entirely, saying it would add thousands of pounds to home building costs and threaten many projects. The tax was first proposed in 2021, following the Grenfell Tower fire tragedy. It aims to raise about £3.4 billion for improving building safety, with some funds designated for removing dangerous cladding. While £5.1 billion has been allocated to address the cladding crisis, work has not started on many affected buildings, leaving residents anxious about safety and repair costs. Developers have expressed concerns that the tax on new housing will limit investment necessary to meet housing demand. They argue they are already contributing through other taxes and believe that manufacturers of unsafe cladding should cover more costs. Despite the challenges faced, the Ministry for Housing remains focused on improving safety in homes. They believe the extension will help developers better prepare for the tax while continuing efforts to rectify issues with unsafe cladding.