By using this website, you agree to our use of cookies to enhance your experience.


No measures to plug VAT ‘inequality’ between new builds and renovations

There were calls ahead of yesterday’s Budget statement for the chancellor Philip Hammond to announce fresh measures to plug the ‘inequality’ in VAT between new builds (0%) and renovations (rated at 20%).

Carol Peett, managing director of West Wales Property Finders, was among those seeking change and urged the chancellor to introduce a fairer solution by bringing it in line with the 5% VAT rate that is chargeable on renovating a dwelling that has been empty for at least two years.

Her vision was that the existing housing shortage could be alleviated by encouraging people to extend their living space, enabling a property suitable for a couple to be converted into one able to house a family. 


Steven Way, practice principal at Collier Stevens chartered surveyors, also wanted to see the VAT rate altered, but in the end the chancellor did not even mention VAT, or housing for that matter, which Way said was “totally bizarre”.

He commented: “The VAT system as it stands is a complete muddle, particularly from a building practitioner’s point of view.

“For new builds, it is clear cut, but when it comes to listed buildings and accessibility projects, there seems to be no hard and fast rules for professionals on those which are rated at 0% and those which are not.

“George Osborne made the peculiar decision to increase the amount of VAT relief on maintenance work to listed buildings in 2012, but not to any new work. We are still reeling from this. If we want to maintain the country’s built environment and heritage, the chancellor should be looking at a new VAT regime.

“As it stands, there is still lots of building work going on, but if the economy changes I’m sure many people will decide not to build simply because of the cost. Or much of this work will start to be fuelled by the black economy, with plenty of cash being exchanged for domestic building work, extensions and alterations.”


Please login to comment

MovePal MovePal MovePal
sign up