VAT Self Builds

One advantage of building a new house, as apposed to renovating or extending, is that all the building work is free of Value Added Tax (VAT) which means a saving of 20% at the current rate.  If you are using a VAT registered contractor, then

all of their invoices for labour and materials should be VAT zero rated to exclude VAT.  If you are managing the project and therefore buying materials you will have to pay for the VAT.  The good news is this VAT can be claimed back on completion by applying to your local Customs and Excise VAT office (VAT Notice 719).  Its worth noting that you can only make one claim should be made within three months of your practical completion date and a return should be made to you on approval within 30days.

Things to know

  • You are only entitled to claim VAT back on new builds only.  You cannot claim VAT back on extensions or buildings which are related to business activity.  If the building is for business then there are other off setting measures which your accountant can advise you on.
  • A business interest includes having the intention to sell on the property or leasing the property post completion
  • If the contractor is employed to supply materials and labout then you should not be charged VAT for either.  If you are, speak to your architect or your local VAT enquiry office.  If the builder is VAT registered then he will be able to claim back the VAT on his own return.
  • You will not be able to claim the VAT back on professional services such as surveyors, engineers, architects. Nor can you claim VAT back on hire equipment e.g. JCB and driver.
  • If supplying your own materials, ensure you keep all receipts and a record of all out goings for reconciliation.


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