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22-11-2018

VAT relief on building a new home

The VAT DIY Housebuilders scheme is a special scheme, enabling homeowners building a home to benefit from the special VAT rules that allow the qualifying construction costs of new homes and certain conversion works to be zero-rated. The scheme has been designed to effectively put homeowners in a similar position to a property developer.

A claim can be made for qualifying building materials on which VAT has been charged. Qualifying materials include most materials incorporated into a new building or conversion which cannot be easily removed. There are a number of exceptions including fitted furniture, carpets, and some domestic appliances.

Homeowners can also claim for building materials purchased from another EU member state by converting the amount of VAT paid into the sterling equivalent, and providing proper evidence of shipping etc. It is not possible to claim the VAT for any professional or supervisory services associated with the development.

There are also time limits that should be adhered to when making a claim. A claim must usually be made within three months of the completion of the conversion or new building using the appropriate form. A repayment is usually made within 30 days of a claim being submitted.

There are two main forms for making a claim. The first form (VAT 431NB) is designed for new builds, and the second form (VAT431C) is designed for qualifying conversions i.e. the conversion of a non-residential property to residential. The VAT431NB form has recently been updated.

Source: HM Revenue & Customs | 22-11-2018


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