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HMRC internal manual

VAT Construction

HM Revenue & Customs
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Reduced-rating the renovation or alteration of empty residential premises: scope

The following works are eligible for a reduced rate of VAT of 5 per cent:

  • the renovation or alteration to a ‘single household dwelling’
  • the renovation or alteration of a building that will be used solely for a ‘relevant residential purpose’
  • the renovation or alteration of a multiple occupancy dwelling (such as bed-sits)

provided that the premises have not been lived in for at least two years when the work starts.

Note: Prior to 1 January 2008, in order to be eligible for the reduced rate, the building in question had not to have been lived in for three years or more.