Zero-rating major interest grants in buildings: holiday homes: exclusion from zero-rating
For the purposes of the zero rate on grants of major interests, a holiday home is a building designed as a dwelling or a number of dwellings where residency throughout the year or use as a principle private residence is prevented. The first grant of a major interest in such a holiday home is standard-rated.
If the holiday home is at least three years old when the first grant is made, the grant will be exempt.
Further information on holiday accommodation can be found in the VATLP Land and Property guidance.
The legal basis for excluding the grant of holiday homes from zero-rating is the Value Added Tax Act 1994, Schedule 8, Group 5, Note 13.