Developers may soon be able to meet certain environmental obligations in a different way. The nature restoration levy came into force on 11 September 2026 and introduces a new framework designed to support strategic nature recovery while potentially simplifying how developers address environmental impacts on protected sites and species.
The new regime allows developers, in certain circumstances, to contribute to wider environmental improvement projects rather than delivering site-specific mitigation measures themselves. While the practical impact will depend on how the framework is implemented across England and Wales, developers, landowners and registered providers should understand how the levy could affect development costs, planning strategies and site acquisition due diligence. This article explores the levy and its potential impact on developers and registered providers.
Historically, developers were generally required to assess the impact of proposed development on protected habitats and species and identify where any mitigation measures were needed.
The government considered that this approach was not achieving the environmental improvement at the scale required and has introduced a more strategic model.
Under the new regime, Natural-e England can prepare environmental development plans for specific areas. These plans identify the environmental pressures affecting protected sites or species and set out strategic conservation measures intended to address them.
Where a development falls within the scope of an environmental development plan, a developer may be able to satisfy certain environmental obligations by paying a nature restoration levy. Natural England will use those levy payments to fund the conservation measures identified in the relevant plan.
For some developments, participation in the levy regime may be mandatory.
A levy may become payable where an environmental development plan applies to a proposed development.
Liability will generally need to be addressed before development starts and, where a levy is payable, development cannot normally proceed until payment requirements have been met.
Developers should identify at an early stage whether a site falls within an area covered by an environmental development plan.
In most cases, the developer will be responsible for the levy. However, liability should be reviewed on a case-by-case basis as the legislation allows Natural England to impose or apportion liability in certain circumstances, including where no person has assumed liability.
The legislation also contains provisions allowing liability to be transferred and, in some situations, imposes joint and several liability.
Natural England is responsible for calculating the levy.
The amount payable may vary depending on factors such as location, the type and scale of development, the number of dwellings proposed and criteria set out in the relevant environmental development plan.
The calculation method will depend on the specific plan that applies to the development.
Levy payments must be used by Natural England to fund conservation measures and related activities identified in the relevant environmental development plan.
The intention is to deliver environmental improvements at a larger scale than might be achieved through individual site-specific mitigation measures.
Natural England has enforcement powers where levy requirements are not met. These include warning notices, stop notices and financial surcharges in certain circumstances.
Levy liabilities may also be registered as local land charges until they have been discharged. This means levy-related enquiries are likely to form an important part of development and acquisition due diligence.
Yes. A person liable for the levy may ask Natural England to review its calculation of the levy or its apportionment of liability.
The levy could have a significant effect on development appraisals and planning strategies. Developers will need to consider whether an environmental development plan applies to the site, if participation in the levy regime is voluntary or mandatory, the likely levy cost and timing of payment, whether levy costs have been factored into development budgets and how the levy affects project viability and programme delivery.
Importantly, payment of the levy only addresses environmental impacts covered by the relevant environmental development plan. Developers may still need to comply with other planning, environmental and ecological requirements.
Registered providers acquiring development sites should ensure that levy issues form part of their standard due diligence process.
Key questions whether an environmental development plan applies to the site, has levy liability arisen and if so, has it been paid, whether the liability to pay could transfer to a future owner and are contractual protections needed.
Given the potential for levy liabilities to be registered as local land charges, these issues should be investigated alongside other title, planning and environmental matters.
The new levy represents a move away from a site-by-site approach to environmental mitigation towards a more strategic model of nature recovery.
While the framework could simplify how some environmental obligations are addressed, it also introduces a new cost and due diligence consideration for developers, landowners and registered providers. Those involved in acquiring, funding or developing land should monitor how environmental development plans are rolled out and assess the potential impact on projects at an early stage.
For further information on the nature restoration levy, please contact our real estate team.
