What VAT rate applies to building work on my home?
Most work on an existing home, including extensions, loft conversions and refurbishments, is charged at the standard 20% VAT rate by a VAT-registered builder. Building a new dwelling, including a replacement house after full demolition, is usually zero-rated. A reduced 5% rate can apply to renovating a home empty for two years or more, and to conversions that change the number of dwellings.
When is building work zero-rated?
Constructing a new dwelling is usually zero-rated when done by a VAT-registered builder, as long as the building is designed as a home and the old building (if any) was demolished completely to ground level. Self-builders who buy materials directly may be able to reclaim VAT through HMRC’s DIY housebuilders scheme.
When does the 5% rate apply?
For renovating or altering a dwelling that has been empty for at least two years, and for converting a building so that the number of dwellings changes, for example a house into flats. Conditions apply and HMRC guidance should be checked for your project.
Is VAT included in your guide prices?
Yes. Our guide prices include VAT at 20% where it applies, and new-build and rebuild figures assume zero-rating where the work qualifies. Your written quote shows VAT separately.
Related projects
This guide is general information about building work in the UK, not legal or tax advice. Rules change, so check the current position for your property with the council, HMRC or a qualified adviser before relying on it.