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HMRC internal manual

VAT Construction

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HM Revenue & Customs
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Zero-rating major interest grants after a non-residential conversion: 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 a building that has been converted to a holiday home is exempt.

However, if, after conversion, the building is less than three years old when the grant is made, the grant will be standard-rated.

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.

Applying Note 13 to residence restrictions

The guidance in VCONST03420 applies in the same way to this guidance here.

Use ‘for the whole of the year’

The guidance in VCONST03430 applies in the same way to this guidance here.

What ‘principal private residence’ means

The guidance in VCONST03440 applies in the same way to this guidance here.