VAT on conversion of commercial property to residential use

Whether you are a developer, landlord, or investor, understanding how VAT regulations apply to such projects is crucial for accurate budgeting, compliance, and financial planning.

Conversion of under-used or empty office blocks or barns to residential use is immensely popular at present, driven partly by the lack of affordable housing and the relaxed Planning laws.

Construction services for these conversions are VAT reduced rate, 5%, but often builders will mistakenly or cautiously charge 20% VAT, so you should explain at the initial engagement with each contractor that you expect them to use the correct reduced rate.

The installation of some goods by a builder will be VAT standard rate.

To discuss this in further detail, please get in touch with one our experienced Indirect Tax Services team.