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HMRC internal manual

VAT Construction

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‘Relevant residential purpose’ - interpretation of terms: relevant residential purpose - background: statutory definition

Note: In addition to dwellings, the zero and reduced rates may apply to buildings intended for use solely for a ‘relevant residential purpose’.

The meaning of ‘relevant residential purpose’ is common to the construction zero rate and reduced rate.

For zero-rated construction and conversion, the definition is at Value Added Tax Act 1994, Schedule 8, Group 5, Note 4.

For zero-rated approved alterations, the Value Added Tax Act 1994, Schedule 8, Group 6, Note 3 imports the definition in Note 4 (but not Note 5) (VCONST08150).

For reduced-rating residential conversions, the same definition of relevant residential purpose in Note 4 to Group 5, Schedule 8 of the Value Added Tax Act 1994 is reproduced in Schedule 7A, Group 6, Paragraph 6 of the Notes.

For reduced-rating renovations of empty properties, the Value Added Tax Act 1994, Schedule 7A, Group 7, Paragraph 2(4) of the Notes imports the above definition from Schedule 7A, Group 6, Paragraph 6.