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If you’re building new homes, one of the most important VAT questions is:
Can I reclaim the VAT on materials and labour?

The short answer is yes—in many cases.
But there are important conditions and exceptions.

Here’s how it works.

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VAT on Residential New Builds: The Basics

The sale of new residential dwellings is usually zero-rated for VAT.

That means:

• You don’t charge VAT when selling the home
• But you can reclaim VAT on many build costs

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What You Can Usually Claim VAT On

✅ Building materials – bricks, windows, plasterboard, insulation, etc.
✅ Professional fees – architect, surveyor, structural engineer
✅ Subcontractor labour (if they’re VAT registered and charging VAT)
✅ Plant or equipment hire (e.g. diggers, scaffolding)

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What You Can’t Claim VAT On

🚫 White goods and furniture
🚫 Fitted carpets and some floor coverings
🚫 Landscaping, patios, garden walls (unless they’re part of planning conditions)
🚫 Costs on buildings converted into homes (without special relief)

💡 Work must be done to qualify as a new build—not a renovation or extension.

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Zero-Rating vs Exempt

• Zero-rated = You don’t charge VAT, but you can reclaim input VAT
• Exempt = You don’t charge VAT and you can’t reclaim input VAT

New residential homes = zero-rated
Residential rent = exempt

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Top Tip: Use VAT Invoices

To reclaim VAT, make sure:

• The supplier is VAT registered
• The invoice includes their VAT number
• You keep copies for your records

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Conclusion: Keep More of Your Profit

If you’re building residential property, make sure you don’t lose out on thousands in unreclaimed VAT.

📞 Need help claiming VAT back on your next project? Call us 0161 989 9560
We’ll make sure you’re getting everything you’re entitled to.