291. Supply of construction work.

The construction or development of new dwellings, qualifying residential or qualifying charitable property is zero-rated for the purposes of value added tax (VAT)1. A garage built at the same time as the dwelling for use with it will usually also benefit from zero-rating. Work of converting a non-residential property into residential property and of converting, for example, a house into flats, and renovation of a dwelling which has been empty for two years or more, is chargeable at the five per cent rate2.

A residential developer, building new houses and flats for sale, will be able to recover his input