Consultation response: Scottish Building Safety Levy
The ATT has responded to the Scottish Government's technical consultation on the Scottish Building Safety Levy.
The consultation sought feedback on several practical aspects on the scope of the new levy being introduced in April 2028, exploring areas such as floorspace methodology, exemptions and reliefs, as well as payment arrangements. Our response focused on the questions relevant to our remit as a tax professional body.
In our response, we agreed that floorspace should be calculated using the Gross Internal Area (GIA), which is consistent with the approach taken for the UK Government's Building Safety Levy in England. In respect of the proposed exclusion of communal areas, we highlighted the need for the Scottish Government to produce guidance to allow developers to assess their liability correctly.
We supported the introduction of a relief for units built on brownfield land, which could include land that has been contaminated. We recommended that the Scottish Government reviews the Corporation Tax rules for land remediation expenditure when designing the scope of the relief, in particular the rules denying relief where the entity responsible or a connected person is the original polluter.
In relation to proposals for a further exemption for conversions, we stressed the importance of ensuring that any additional relief is carefully designed to avoid more relief claimed than intended. this could arise, for example, where the work would also qualify for any relief introduced for units built on brownfield land. We highlighted the former Flat Conversion Allowance, which operated between 2001 and 2013, and recommended that the Scottish Government considers whether a similar claw back provision would be appropriate for Scottish Building Safety Levy.
Finally, we recognised the benefits of a relief for units sold onto first-time buyers, alongside other measures such as the First Homes Fund. To promote consistency across the devolved taxes, we felt that the criteria should reflect first-time buyer relief under Land and Buildings Transaction Tax (LBTT). To ensure that the relief was correctly claimed, Revenue Scotland could use the LBTT returns from the sale of property to verify that the property had indeed been sold to first-time buyers.