The proposed Scottish Building Safety Levy would apply to the construction of new residential buildings, mirroring measures being introduced in England through the Building Safety Act passed by the UK Parliament.

Funds raised through the levy would support the Scottish Government’s cladding remediation programme.

Deputy first minister and finance secretary Shona Robison said: “We are determined to safeguard people living in buildings with unsafe cladding. I know that developers share this determination and have made significant progress to date.

“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. I welcome the UK Government’s collaborative approach on this issue.

“It is important that we also continue working side by side with developers. To that end, and in line with our New Deal for Business and Framework for Tax, we will now liaise with the sector to ensure this levy best contributes to our mission of keeping people safe.”

The 2023-24 Programme for Government committed the Scottish Government to seek the transfer of powers to introduce a new tax in Scotland equivalent to the UK Government’s Building Safety Levy for England.

A joint consultation sought views on the devolution proposal, including any evidence to inform consideration of the potential for the new tax to create or incentivise economic distortions and arbitrage within the UK.

The UK Government will now legislate to devolve the necessary powers to the Scottish Parliament to introduce a Scottish Building Safety Levy.

Details of how the Scottish Building Safety Levy will operate will be developed through consultation and liaison with the UK Government and housebuilding sector.