VAT on building a new home

If you’re building a new home, you may be able to reclaim the VAT back on the materials used, potentially making a lot of difference to the final costs.

You can apply for a VAT refund on building materials and services if you’re:

  • building a new home
  • converting a property into a home
  • building a non-profit communal residence – e.g. a hospice
  • building a property for a charity

The building work and materials have to qualify and you must apply to HM Revenue and Customs (HMRC) within 3 months of completing the work.

To qualify for the reclaim of VAT, you must meet the following conditions:

  • 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.
  • The building must be 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

What doesn’t qualify?

  • 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

How to claim

Fill in form 431NB to claim a VAT refund on a new build, or 431C to claim for a conversion.

There are lots of useful guidance notes included with these forms.

For further information or help on the above, please call the office on 0116 242 3400 or emails on info@torrwaterfield.co.uk 

James Yarnall, Accounts 

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