VAT DIY Housebuilders Scheme: Reclaim VAT on a Self Build

Building your own home? You may be able to reclaim VAT

If you’re building your own home, the VAT DIY Housebuilders Scheme could allow you to reclaim VAT paid on qualifying building materials.

The scheme is designed to put eligible self-builders in a broadly similar VAT position to someone buying a new home from a property developer, where the sale would normally be zero-rated for VAT. 

Who can claim under the VAT DIY Housebuilders Scheme?

For a qualifying new build, you must have the appropriate planning permission and the property must meet HMRC’s conditions. This includes new homes being built for you or your relatives to use as a family home for residential or holiday purposes. Some restrictions apply, including where a property is being built to sell, let or use for a business purpose. 

You don’t necessarily need to carry out the building work yourself. Eligible materials that you purchase and provide to your builder can also potentially form part of your VAT refund claim. 

What VAT can you reclaim on a self build?

You can generally claim VAT on eligible building materials incorporated into the new home or its site during construction and ordinarily used in that type of building. 

However, not everything qualifies. Exclusions include:

• carpets, underlay and carpet tiles
• most fitted furniture, although qualifying fitted kitchen furniture can be included
• most electrical and gas appliances
• tools and equipment
• sheds, greenhouses and garden ornaments
• consumables that are not incorporated into the finished building. 

It’s also important to check invoices as your project progresses. HMRC states that you can only reclaim VAT that has been correctly charged. If a supplier has charged VAT incorrectly, you should ask the supplier to correct it rather than include it in your DIY housebuilders VAT claim. 

You can only make one VAT refund claim under the scheme, so getting the timing and supporting information right matters. Your claim must normally be made within six months of completion.

Building your own home or unsure about the VAT position?

Get in touch with our expert and friendly team to talk through your circumstances. Call us now on 01380 723692 or email here.