Pay only 5% VAT for some renovations

Did you know that if your house has been unoccupied for 2 years, or if you are bringing an unused barn or outbuilding into residential use for the first time, you are eligible to pay only 5% VAT on your construction works? Several of our clients have available of this scheme (VAT notice 708, sections 7 and 8), and we recently had a case study about one such project published in Self-Build Ireland, which you can read about here.

To take advantage of this, you must prove to the builder’s accountant that your property qualifies. Typically two or more pieces of evidence are required. Our clients have done this before using some of the following:

• confirmation from an estate agent that the house has been on the market, and empty for 2 or more years, if relevant;
• a death certificate of the previous occupant, or letter from a care home confirming the date at which they moved in;
• a rates bill showing the property listed as vacant;
• utilities bills showing decreased usage as it’s been unoccupied;
• letters from neighbours confirming that no-one has been living at the property for that time.

Once the contractor’s accountant is satisfied of the evidence, the contractor can then charge you the reduced 5% for any works you carry out. This can bring a great saving. Note the reduction does not extend to certain items such as professional services, and non-fixed internal fittings and appliances. Feel free to ask us any questions and we’ll do our best to answer based on our experiences with this VAT saving. Image by Jamie Trimble.