2 Year VAT discount


Regarding the discount from 17.5% to 5% VAT for properties which have been empty for 2 years or more, is this applicable to building meterials for a potential owner occupier? Or is this for VAT registered developers to claim back the VAT?

I have an individual who has purchased an empty, and wished to renovate. It has been empty over 2 years. Can anyone please enlighten me as to how this discount works for individuals such as this.

Thank you

tax and VAT

Hi Luke
The answer would appear to be "No", unless it has been empty for over 10 years.   I have put the relevant VAT Guidance in the Information Library. 
You may also want to look at the main VAT Guidance on Building and Construction (VAT Notice 708. Again there is a link in the Library).
Another campaigning point for NAEPP to take up!
Best wishes
David Gibbens

I think what should happen here is that you, Luke, as Empty Property Officer, confirm (if you can) in writing that the property has been empty for over two years, and the owner then gives this letter to his contractor, who then charges him 5% VAT (I simply check with our Council Tax department).
It doesn't matter that he is going to occupy the building himself; so long as he is employing a contractor to do the renovation work, and that contractor is VAT-registered, then the reduced rate should apply.
I have occasionally heard that smaller contractors don't like the complications this causes and would rather walk away from the job, but I have issued many certificates and owner-occupiers have successfully obtained the reduced rate on qualifying works.

Hi J and L
I'm sure you are right if the owner is paying a builder - it is simply a matter of the builder charging the 5% VAT on the cost of the works.  
However, I assumed, from the reference to "building materials", that this was self-build rather than using a contractor, which is why I put the VAT rules for self-build into the library.
Other points to watch out for, if the work is being done by a contractor, are the rules around occupation ie whether or not the building is occupied when the works begin can affect the position (see Section 8.3 of VAT Notice 708).
Because of these technicalities I would never "advise" a property owner on financial issues but make him or her aware of the advice available from the HMRC.  
David Gibbens

Thank you both for your reply.
The property was a 2 year empty, and therefore I have written a letter to the owner confirming the last date of occupation as identified through Council Tax.
I was nder the impretion that building materials could be discounted, but thanks tho your responses I ahve been able to inform the owner accordingly.
Again Thank you

I've had  a query from an owner who wants to prove her property has been empty for 2 years in order to get the VAT reduction on repairs.  She has owned it and declared it empty with the council since October 2010 so can get a letter from council tax stating its been empty since then, but she says it was empty before she bought it and the council is saying they can't give out information about the status of the property before she bought it due to data protection.  Does anyone have any suggestions about how she can prove the place was empty before she bought it?
Scottish Empty Homes Partnership

As EPO you can access the details of the previous owners and establish the last date of occupancy from their records. By simply supplying the date of last occupation you are not giving out any personal details or data relating specifically to that person. Additionally, occupation could previously have been a tenant or the owner occupier, in this case there is no need to be specific. We have not had any issues regarding providing dates
Other ways of proving the property has been empty without the Council Tax data would be for the new owner to contact the previous service suppliers. They should have record of the charges and when the last "units" were used and the account was then billed as standing charge only
Hope this helps
Paul Wilkinson EPO
Mansfield DC

As EPO, you don't have to supply compelling proof from Council Tax.  Your letter to the owner/HMRC IS the proof that a home has been empty.  If, in your professional opinion (for example based on talking to neighbours or some other evidence you have, like a complaint) you think the property has been empty for over 2 years, then you can write the letter that says so.  
Of course, I agree that it is best to source the evidence from Council Tax.  But Council Tax data is not always reliable, as we know.  It might indicate it was empty when it was not or occupied when it was not.
However, on no account should any EPO furnish a letter stating that a home has been empty for 2+ yers without some substantial evidence.  That would undermine our entire profession.

I have provided numerour letters for empty home owners confirming how long the property has been empty. I usually go off of Council Tax records but sometimes due to exemptions this is not accurate. On those occassions I use personal knowledge of the property and property files if applicable to verify the time empty. I then provide this letter to the owner who passes it on to their contractor.
Section 8.3.2 of HMRC Notice 708 (Buildings and Construction) states how an owner/contractor can prove that a property has been vacant for the qualifying time period.
Section 8.1.2 identifies the condition that must be met for the works to be eligible.
Reduced rate of VAT can also be applied if the owner is living in the property at the time of the works being carried out but the conditions vary from those above. This is explained under Section 8.3.4 of the guidance.
I find the guidance document really useful and often refer empty home owners to it to discuss it with their contractors to make sure that it is something that they are happy to proceed with.  
Hope this helps!
Ruth Whittle
Empty Homes Officer, Cheshire West and Chester Council.

Hi All,
Thanks for your previous replies to my query about proving a home has been empty in order to recieve the VAT discount.  In the same case, where we are trying to get the council to write a letter for the owner stating this, the council has now come back to me asking if there is a specific statuory gateway to allow them to disclose how long the property has been empty. 
Below a quote from their email:
"There would therefore need to be a specific statutory gateway for disclosure. If there is one it should be given and cited to us so that we can look into it further (as none appears evident). "
Any suggestions for a reply?  They seem to think it would be a data protection issue to say how long the property has been empty.
Any thoughts welcome,

My assumption would be, it would be the legislation which allows you to use council tax data for the identification of owners and bringing homes back into use.
Additionally I don't see how data protection is relevant if you are telling the owner and council tax payer how long their property has been empty, and how long they have been paying zero occupancy rates. You are not releasing data which would be sensitive to anyone but the current owner, they would then give this to builders etc.
p.s. any progress on the video from the confrence?

Hi All

In response to all the Q&A's on this subject - does anybody else at other Local Authorities charge for putting a letter together advising how long the property has been empty for? Or do you do this FOC?

Thank you in advance.

Nikki Bryant
Empty Homes Officer
Gedling Borough Council

Hi Nikki,

We charge £57 +VAT for the letter

Adrian Anderson

Housing Officer

Amber Valley Borough Council

Hi Nikki,

We don't charge for this service in Plymouth. Whilst it could be a bit of income generation, given that we only issue maybe two or three a month, it just wouldn't be worth the administration time / costs (We would need to set up each owner as a Debtor to the council, open a debtor account etc., raise an invoice, chase etc.).

We have access to our Council Tax systems and so can check the dates / write a letter in less than 10 mins. We feel that adding a charge for this service could also just be another barrier (albeit a small one) to returning the property to use.

Hope this helps,


Plymouth City Council

Hi Scott

Thank you for your response. I have never issued one before so just wanted to check what other Council's were charging for the letter. I have taken on board yours and Adrian's comments.

I think we will probably issue the letter FOC due to the amount that we will probably issue as a LA.

Many thanks


I completely agree with Scott that the whole point of making owners aware of the reduced-rate of VAT and supplying them with the confirmation of the two years empty is to encourage them to bring their home back into use sooner rather than later.  This is why we do not charge for this.  We do not produce a high quantity of these letters, but definitely more than in past years so the word is definitely getting around accountants/architects and owners.  My feeling is that a 15% VAT saving can represent such a huge saving on a big repairs project that the project is more likely to finish and become reoccupied if it ends up costing less. 

Lynne Leach, Empty Homes officer, South Lakeland District Council

Lynne Leach

Hi Lynne

Many thanks for your comments. I am of the same opinion as yourself, I feel that it we were to charge for these letters there would be a reluctance from the owners to go ahead with the offer we are informing them of.