VAT Reliefs

New reliefs on VAT have been introduced by government in various budgets as follows:

• A reduction in VAT from 17.5% to 5% on costs of renovating single house dwellings that have been empty for 3 years (as of March 2008, this will be reduced to 2 years).
• Zero rating on the sale of renovated buildings that have not been used for residential purposes for at least 10 years.

The rate has also been cut on other urban regeneration measures/projects including the costs of converting housing into flats or bed-sits, or vice versa.

How the VAT Reliefs Affect Empty Properties

• A builder can charge a reduced 5% rate of VAT on work to renovate a house that has been empty for 3 years or more.
• A developer or house owner can claim back all VAT charged on the renovation of a building that has been empty for 10 years or more once the dwelling is sold. If the house owner retains the property for private residential use, they can make a claim for the VAT under the DIY Builders Refund Scheme available from Customs and Excise.

Help From Your Local Authority Enabling Officer

How your Local Authority Housing Enabling Officer (Empty Properties) can help:

• By confirming that a property has been empty for 10 years; or
• By confirming that a building has been empty for 3 years
• The above is confirmed with an official letter, which is sent to the developer or house owner. This can be used as evidence that the building has been empty should Customs need to check.

For further information please contact HM Revenues and Customs National Advice Service on 0845 0109000 or visit the HM Revenues and Customs website at HM Revenues and Customs Website (www.hmce.gov.uk).