VAT
VAT Discounts
Long term sustainable growth by bringing empty properties back into use is at the centre of Empty Homes’ mission. Currently, there are some VAT discounts can that be utilised by those renovating empty properties. It is important to be aware of these discounts, as it is difficult to reclaim overpaid VAT.
If you are bringing an empty property back into use that has been empty for two years before the start of building, will be used only for residential purposes after the completion of the renovations and you are using builders to complete these works, you may be eligible for a reduced rate VAT (currently at 5%).
If you are bring an empty property back into use that has been empty for more than ten years before the onset of the renovations, will be used for residential purposes after the works are completed and you are using builders, you may be eligible for zero rate VAT.
If you are completing the building work yourself, there is no reduced rate VAT available. In DiY work, if property has been empty for ten years before the onset of the renovation, and will be used only for residential purposes after the work is complete, you may be eligible for zero rate VAT.
Builders may not be aware the VAT rates and discounts for residential properties being brought back into use. More information is available on VAT discounts in the Homes and Communities Agency’s Empty Homes Toolkit (link) and The full guidance on VAT on building and construction is available from HMRC in HMRC notice 708 if you are employing builders, and HMRC notice 431C if you are carrying out work on a DIY basis.
Empty Homes has been proactive member in the Cut the VAT Coalition, which is working towards greater reductions in VAT rates for those bringing empty properties back into use. Ultimately Empty Homes is working towards the goal of harmonising VAT between new build and refurbishment to establish a level playing field. The Government needs to work harder to join-up its regeneration and fiscal policies. Encouraging 60% development on brown field sites runs contrary to the current VAT regime, which favours new build. This policy is not sustainable in the long-term.
Cut The VAT
Empty Homes fully supports the Cut the VAT Campaign, which argues that VAT on all home repair, maintenance and improvement work should be reduced from 20% to 5%. Independent research shows that this particular change to VAT rates would bring about a number of significant advantages, which include stimulating economic growth, creating tens of thousands of jobs, improving the UK’s housing stock, encouraging spending on energy efficient home improvements and a dramatic reduction in the competitive advantage of cowboy builders. Information about how you can get involved in the campaign is available on the Cut the VAT website. Please visit the website to sign the online petition and find out more about how you can help us to make an impact. You can also like the campaign on Facebook and share the information with your followers on Twitter.
Empty Homes believes that reducing VAT from 17.5% to 5% for all maintenance and home improvement work would help the Government achieve its target of cutting carbon emissions by 60% by 2050.
It would also benefit millions of UK homeowners by getting rid of cowboy builders, helping those who cannot afford vital repairs to their homes, bringing our empty properties back into use and protecting the countryside.
The benefits in reducing VAT that will accrue for both society and business are many and varied and include at least nine convincing reasons to get VAT reduced.
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