VAT on Home Renovations: What You Need to Know

Short answer: most renovation, extension and repair work on an existing home is charged at the standard 20% VAT rate. A reduced 5% rate or zero rate can apply in specific situations — most commonly a genuinely new build, a property empty for two years or more before work starts, or certain energy-saving materials — but the qualifying conditions are strict and it's worth confirming before assuming a project qualifies.

Standard rate (20%) — the default

Most day-to-day building work on an occupied or recently-occupied home falls into this category: extensions, kitchen and bathroom refits, general renovation, repairs and maintenance.

Situations where a reduced or zero rate can apply

• New-build homes: constructing a genuinely new dwelling is normally zero-rated, though the rules for what counts as "new" and what work qualifies within that project are specific.
• Properties empty for two years or more: renovating a residential property that has been unoccupied for at least two years before work starts can qualify for the reduced 5% rate, subject to evidence of the empty period.
• Properties empty for ten years or more: some work on a property empty for a decade or longer can qualify for zero-rating rather than the reduced rate.
• Converting a building into a different number of dwellings: for example converting a house into flats, or several flats into a single house, can qualify for the reduced rate.
• Certain energy-saving materials: installation of specific energy-saving measures (such as insulation or heat pumps) in residential accommodation can qualify for a reduced or zero rate under separate rules.

What this means in practice

If you think your project might qualify for anything other than the standard rate, raise it with us and with your accountant before work starts — the evidence needed (such as proof of an empty period) generally has to be gathered before or during the work, not after the invoice is raised.

VAT rules are set by HMRC and are subject to change and to specific conditions on individual projects. This is general guidance, not tax advice — always confirm the correct VAT treatment for your project with your accountant, VAT specialist or HMRC directly before relying on it.