Building a new home and VAT


The application form has guidance on what building projects and materials qualify for a VAT refund. The basics are listed below.

New homes

The home must:

  • be separate and self-contained
  • be for you or your family to live or holiday in
  • not be for business purposes (you can use one room as a work from home office)

Builders working on new buildings should be zero-rated anyway and you won’t pay any VAT on their services.


The building being converted must usually be a non-residential building. Residential buildings qualify if they haven’t been lived in for at least 10 years.

You may claim a refund for builders’ work on a conversion of non-residential building into a home.

For other conversions builders can charge a reduced VAT rate.

Communal and charity buildings

You may get a VAT refund if the building is for one of the following purposes:

  • non-business - you can’t charge a fee for the use of the building
  • charitable, for example a hospice
  • residential, for example a children’s home

Building materials

You may claim a VAT refund for building materials that are incorporated into the building and can’t be removed without tools or damaging the building.

What doesn’t qualify

You can’t get a VAT refund for:

  • building projects in the Channel Islands
  • materials or services that don’t have any VAT - for example, they were zero-rated or exempt
  • professional or supervisory fees - for example, architects or surveyors
  • hiring machinery or equipment
  • buildings for business purposes
  • buildings that can’t be sold or used separately from another property because of a planning permission condition
  • building materials that aren’t permanently attached to or part of the building itself
  • fitted furniture, some electrical and gas appliances, carpets or garden ornaments