VAT relief on house restoration

Hi Stefano,
If the companies who are supplying the goods also install those goods and all the other conditions are met as per the following guidance then you should be able to benefit from the 5% VAT rate:
Buildings and construction (VAT Notice 708).
Thank you.

Hi there, I have a question on the scope of the works that are covered under this reduced rate. We qualify under the terms of the VAT relief for renovating an empty residential property (Buildings and construction (VAT Notice 708)) and are having a bathroom and kitchen installed alongside other works to our property. The bathroom work involves boxing around bath / shower enclosure, tiling walls and floor, and installing the loo, sink and shower. The kitchen work is to install a pre-made set of kitchen units and appliances and tiling. Do these qualify for the reduced rate? Thanks for your help.

Hi Adam Foyster,
You will only be able to make a claim if you or your family is residing in the property.
If you allow contractors to buy the materials for you, then you will need to provide the evidence to us that you have paid the original supplier yourself. If you cannot show this, then you would not be able to reclaim the VAT on the materials.
Thank you.

Hi Laurie,
Please see the guidance below:
8. Reduced rating the renovation or alteration of empty residential premises.
Thank you.

@HMRC Admin 21, thank you for the quick response.
My interpretation of this guidance is that the bathroom and kitchen work I have outlined is eligible for the reduced rate.
Could you let me know if you disagree?

Hello,
I have been undertaking major works on a renovation to our house for the last 2 years.
Works paused for some months and are due to recommence early next year.
It has been empty for the entire time and we have a letter confirming that Council Tax has not been payable on the house since March 2023 on the basis that it was considered uninhabitable.
That being the case....
(i) If work recommences after March 2025, am I right in thinking that any work after this time could be conducted at a reduced VAT rate from any contractors of 5%?
(ii) Should this Council Tax confirmation be sufficient for any contractor to be satisfied that they should only charge a reduced rate of VAT?
(iii) In the first phase of works, there was considerable insulation added to walls, floors and roof space.
We seem to have been charged 20% for this by the contractor.
Should this not have been at a reduced rate of 5% for insulation?

Hi Laurie,
If all the conditions outlined in Notice 708 section 8 are satisfied, the installation of the bathroom and kitchen can qualify for the reduced VAT rate.
However, for materials to benefit from this reduced rate, they must be classified as building materials, which excludes most electrical appliances.
Please refer to the guidance provided in Buildings and construction (VAT Notice 708) Section 13.
Thank you.
 

Hi Trevor Nunn,
As long as the conditions are met according to the following guidance, most of the work can benefit from the reduced rate of VAT. 
Please also refer to the evidence that can be provided to the builder:
Buildings and construction (VAT Notice 708) Section 8
There are special rules for the installation of energy-saving materials.
Please see guidance at:
Energy-saving materials and heating equipment (VAT Notice 708/6) Section 2
Thank you.

Hi, I would like to further clarify on the VAT refund on the materials. (Your previous answer: Yes only the VAT registered builder would be able to claim VAT on the materials purchased.There is no special process for this.The VAT registered business would just include the purchases on his regular VAT returns which they submit to HMRC.) There will be materials that I will purchase for finishes (e.g. tiles) and those builder purchases himself (steels, bricks etc). Given your replies for my situation (house unoccupied for 2yrs), only builder can file for VAT refund. Can the builder file for VAT refund for materials purchased by me AND those purchased himself given those for the same project? Thank you

 

Hi. The VAT registered builder will not be able to reclaim the VAT on purchases made by yourself, they will only be able to reclaim the VAT on goods purchased for their business with a valid VAT invoice as evidence for the reclaim. The builder should only charge you for 5% VAT for the materials and the labour and you will unfortunately not be able to reclaim this VAT from HMRC.  Thank you .

 

Hello, I sent an inquiry about a month ago and you confirmed that if we buy a kitchen from a company that will also install it, it is eligible for the 5% VAT reduction (in the meantime we have obtained a letter from the Empty Property Officer confirming that our new house had been empty for a few years before we purchased it). I have another specific question on this regard: do you confirm that the kitchen appliances are not covered by the 5% vat rule, but the extractor fan is? Thank you. Stefano

Hi Stefano,
In order for the goods to benefit from the reduced rate of VAT they would need to be classed as building materials.
Please see the guidance below:
13. The VAT meaning of ‘building materials’.
Thank you.

Hello, We are about to commence work on a residential property owned by us which has been empty since March 2023 (and have evidence of this from Local Authority). However, we are required to pay a deposit against a kitchen now which will not be installed until well after March 2025. Does this mean we have to pay 20% VAT on the deposit now even though it won't be installed until many months after the house would have been empty for 2 years, or can we pay at 20% now and reclaim it after March 2025 if we can evidence that it is now installed until after then (which can be evidenced by the balance of payment on fitting of the kitchen)?

VAT relief may apply to the restoration of properties uninhabited for 10+ years, reducing VAT to 5% for qualifying works. Proof of this includes council records or evidence from prior owners. Share proof with contractors to apply reduced VAT rates on invoices. Relief applies during restoration, even before ownership, but extensions, garages, and landscaping may not qualify. Consult HMRC or a VAT expert for specific guidance on eligible works and timeframes.

Hi, I am purchasing a property that fulfills the reduced vat rate (5%). I plan to do much of the renovation work myself and would like to know how I claim back the vat on building materials? Thank you

Hi - two questions please: 1) If I’m renovating a property that has been empty for 1 year, is it possible to pay standard rate VAT on all the work done before it’s been empty for 2 years and then 5% VAT on the work done after the 2 year point? Or does the property need to be empty for 2 years until *any* of the renovation work can commence, in order to qualify for 5% VAT? 2) Does the reduced rate of VAT apply to building work which goes beyond renovation of the existing building, for example building an extension to the empty property or a building a basement? Thanks KJL

Hi Trevor Nunn,
Is the supplier of the kitchen also fitting the kitchen for you or will this be undertaken by another contractor?
Thank you.

Hi Ricardo Hudson,
If you are converting a non residential property in to a residential property to live in or are renovating a residential property which has not been lived in for 10 years or more then there is a DIY repaymennt scheme which you can use to reclaim the VAT incurred. You can see guidance here:
Claim a VAT refund for a conversion if you're a DIY housebuilder
Thank you 

Hi please could there clarification on what date is meant by "the occupier acquired the dwelling" below under section 8.3.4 for single household dwellings. Is this the purchase date of the property or when they moved in? To expand: we if a person died on the 31st May 2023 and then the house went through probate (and remained unoccupied during this period) and was sold prior to 31st May 2025 (ie prior to 2 years of inoccupation) e.g. March 2025 but the purchaser didn't start renovation until June 2025, and was also living onsite in a caravan whilst the renovation happens - would the reduction of VAT to 5% qualify to the listed qualified works. Or is this only possible if the property is purchased after the 31st May 2025? "8.3.4 People living in the premises whilst you carry out the work There are 2 empty house rules for situations when people are living in the premises while refurbishment work is being carried out. The first relates to all qualifying premises (read paragraph 8.2).The second only relates to ‘single household dwellings’. First rule If the ‘qualifying residential premises’ have not been lived in during the 2 years immediately before your work starts, all of your work is reduced-rated. This is the case even if the premises start to be lived in again while you are carrying out your work. The occupier must move in on a day after you start your work. But if, when your work starts, the premises are already being lived in, or have been lived in during the previous 2 years, all of your work is standard-rated. Second rule You can reduce rate your services of the refurbishment or alterations to a ‘single household dwelling’ where all the following conditions are met: The 2 years immediately before the occupier acquired the dwelling it had not been lived in. No renovation or alteration had been carried out in the 2 years before the occupier acquired the dwelling (you can ignore minor works that were necessary to keep the dwelling dry and secure). Your services are supplied to the occupier ― so if you are a subcontractor you must standard rate your work. Your services take place within 1 year of the occupier acquiring the dwelling."

Hi KLJ.
You can see the guidance here:
Reduced rating the renovation or alteration of empty residential premises
Thank you.