Tax incentives to re-occupy your home

If you are refurbishing an empty property, there are a couple of reductions in the VAT rate that may apply.  Value Added Tax is normally added on top of what you pay for goods and services at a rate of 20% - if the rate of VAT is reduced you will end up with lower refurbishment costs. 

• If your property has been empty for at least 2 years before work commences and will still be lived in by someone, your builder may be able to only charge you 5% VAT on the works. This only applies if the builder is VAT registered and some works, such as scaffolding and professional reports, are excluded.
• If your property has been empty for over 10 years immediately before work commences, and will be lived in by you or your family you may be able to claim back the VAT that you have paid. There is no reduced VAT rate if you complete the works yourself.

The rules about VAT are complicated and you should check out the information that is available about this on www.gov.uk.  It is also possible that your builder is not aware of the concessionary VAT rates and discounts for residential properties being bought back in to use, so you might want to let them know about this.

If you do want to apply for or get a reduced rate of VAT you will need to provide proof that your property has been empty for the necessary length of time and the Empty Homes and Loans Team can provide a written statement to confirm this.

Further information can be obtained from VAT Enquiries on 0300 200 3700.