VAT and Listed Buildings

In October 2012, the government removed the concession for zero-rated VAT on listed building alterations. This change meant that, most work on listed properties would now be set at the standard VAT rate of 20%.

However, there are still some concessions available under certain circumstances. Here’s a couple of instances:

1. Conversion of a non-residential property into a dwelling

5% VAT can be applied to a building which was previously non-residential such as a church, barn or shop (as long as there hasn’t been living accommodation as part of the premises).

For example (as given by HMRC)

You convert a shop into a flat and refurbish existing flats above the shop that have been lived in within the last 10 years. You can apply for zero VAT to convert the shop but not the refurbishment of the flats.

2. Where a domestic property has been empty for 2 years prior to work

When a house has been empty for a minimum of two years prior to starting approved building works. The Local Authority can usually help with this as you would need to supply evidence to HMRC. This is based on the condition that the work has to be finished within one year of the owner purchasing the property.

There are other variations on applying VAT and exemptions. We are not VAT experts but there is more information available. Please see HMRC guidance or another good source of information can be found at The Listed Property Owners Club which offers free VAT advice for their members.