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HMRC internal manual

VAT Construction

From
HM Revenue & Customs
Updated
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Reduced-rating the renovation or alteration of empty residential premises: have the premises been lived in recently: the two empty home conditions

The renovation or alteration of a ‘single household dwelling’ is only reduced-rated when one of two empty home conditions is met. A supply may fall within either of the empty home conditions but not both. Broadly:

  • the first empty home condition applies to suppliers whose work starts before occupation (following a period of the building not being lived in for two years)
  • the second empty home condition applies to suppliers whose work starts after occupation.

The renovation or alteration of a ‘multiple occupancy dwelling’ or a building intended for use solely for a ‘relevant residential purpose’ is only reduced-rated when the first empty home condition is met.

Any given project may involve a number of contractors, whose individual work starts at different times. Before reduced-rating their supply, they must each examine if they meet one of the empty home conditions. They can’t simply follow the position of previous suppliers.

Some contractors working on the project may fall within the first empty home condition and others within the second, depending on the type of building and when their work begins.