Pay 5% VAT on Qualifying Renovations

Did you know that if you’re restoring a long-vacant home, there’s a valuable VAT relief that can enhance your renovation budget. Under HMRC’s Buildings and Construction guidance (VAT Notice 708), certain renovation works to empty residential properties qualify for a reduced VAT rate of 5% instead of the standard 20%. This can allow for greater investment in premium details, like slimline aluminum doors and roof glazing.

For qualifying projects, you won’t pay 20% VAT upfront and then reclaim it; your VAT-registered contractor simply invoices you at 5% from the start, reducing immediate cash outlay, especially beneficial if you’re not VAT registered.

The 2-Year empty rule

 

To qualify for the 5% rate, the property must have been unoccupied for at least 2 years before the work begins.

Required Proof

 

You can use evidence such as:

– Council Tax records

– Electoral Roll

– Utility bills 

– A letter from your local authority’s Empty Property Officer 

 

A letter confirming the home has been empty for 2 years typically suffices.

 

Does Glazing Count?

 

Yes, glazing can qualify when part of the eligible renovation works. HMRC includes works on the dwelling’s fabric, such as double glazing, for reduced VAT when properly structured by your contractor.

 

Steps to Use This Relief

 

  1. Confirm the property has been empty for 2+ years.
  2. Gather evidence (like council documentation).
  3. Share it with your VAT-registered contractor, citing HMRC VAT Notice 708 Section 8.
  4. Complete any necessary certification paperwork.
  5. Your contractor can apply the 5% VAT to qualifying works.

 

Example of Savings:  For eligible glazing work quoted at £20,000 (net)will be a  £3,000 saving.

 

Get in Touch Early

 

At Bespoke Glazing Design, we love restoring character to empty homes with thoughtful renovations. If you believe your property qualifies for the 5% VAT rate, contact us early so we can assist with structuring your glazing package and provide the necessary information for your contractor.

 

Note: VAT rules can vary; consult your contractor or tax adviser to confirm eligibility for your specific project. (VAT Notice 708)