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The chief executive of one of the UK鈥檚 largest housebuilders has said tax rises and building safety levies will add up to 拢40m in extra costs to his business a year.

Dean Finch, boss of Persimmon, has warned the industry faces being hit with 鈥渂illions鈥� in extra costs, implying this could hamper the government鈥檚 efforts to hit its 1.5m homes target.

In comments reported by The Times, Finch said: 鈥淭here are billions of extra costs coming down the line just when the government wants us to crank up building new homes,鈥� he said. 鈥淭he [building safety] levy will also apply to the smaller guys. I don鈥檛 know how smaller housebuilders will be able to afford it.鈥�

Finch said the levy and the National Insurance employer contribution increase announced in the Budget will add between 拢30m to 拢40m to Persimmon鈥檚 annual costs.

The levy, expected to come into effect next autumn, will see developers pay a charge on new residential buildings, with funds used to remediate buildings. It is expected to generate 拢3.4bn.

Finch pointed out the extra costs come on top of the residential property development tax 鈥� a 4% surcharge on developer profits 鈥� and housebuilders鈥� own costs to remediate buildings. 鈥淲e are getting hit three times over鈥�, he said.

Persimmon鈥檚 provision for building safety works stood at 拢283m as of December last year. In March 2023 it signed the 鈥榙eveloper pledge鈥� committing it to fixing life-critical fire safety issues in blocks over 11 metres. Last month, it said it had started or completed work on around 72% of its developments known to have remediation issues.

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Neil Jefferson, chief executive of the Home Builders Federation earlier this month criticised the 拢3.4bn 好色先生TV Safety Levy.

鈥淭his further levy is punitive, targeting small builders many of whom have never even built apartments and poses a threat to jobs, investment and the delivery of private and affordable housing,鈥� he said.

The HBF has said UK housebuilders, with the new levy, will have paid 拢9.4bn towards building safety works. It has called for other sectors, such as overseas developers and cladding manufacturers, to also contribute.