What assessment it has made of the potential impact of the Building Safety Levy on the cost of constructing new homes in the Highlands and …

The Scottish Government has undertaken an assessment of expected impacts of the Building Safety Levy, which has been published alongside indicative rates on 31 July. At £30 million per annum, the Levy represents around 0.8% of the value of the chargeable new build housing market. This is consistent with fluctuations in house prices and other input prices that developers are accustomed to working with. The Scottish Government’s assessment of the long-term impact of the SBSL is that developers are likely to seek to pass on new costs associated with development through the price they pay for the land. This reflects evidence from the Competitions and Markets Authority and the Scottish Land Commission on the transmissibility of new costs associated with residential property development.Through engagement with rural and island stakeholders, the Scottish Government recognises the increasing costs and supply-line challenges that developers on islands and in more rural areas face. To protect these developers, The Building Safety Levy (Scotland) Act 2026 exempts homes built on islands from the Levy and the Scottish Government will extend this to three mainland Highland areas, Cape Wrath, Knoydart and Scoraig, which are only accessible by boat.In addition, the 29-unit levy free allowance will protect smaller developers from costs associated with the Levy, removing an estimated 85% of developers from scope. As smaller housing developments are more common in rural and island areas, including parts of the Highlands and Islands, the levy-free allowance will have a greater impact in these areas, with up to 89% of new homes in remote small towns and remote rural areas being exempt, depending on developer behaviour. Taken together, these protections will reduce the impact of the Levy on those developments and support the continued delivery of new homes across communities in the Highlands and Islands.The Scottish Government will continue to engage with stakeholders and monitor the impacts of the Levy as we progress towards implementation. We will also produce triannual reports on the operation of the Levy, in line with our statutory duties under the 2026 Act.