Most work on existing homes: standard rate
Work to an existing building, including most extensions, renovations and repairs, is normally charged at the standard rate of VAT, if your builder is VAT-registered. Ask whether quotes include or exclude VAT, so you can compare them properly.
Reduced rate (5%)
- Renovating empty homes: renovation or alteration of a home that has not been lived in for 2 years or more can qualify for the 5% rate. Your builder will need evidence, such as a council tax letter confirming how long it has been empty.
- Changing the number of homes: converting a building into a different number of dwellings (for example a house into flats, or flats back into a house) can qualify for 5% on the work that relates to the conversion.
Zero rate (0%)
- New homes: building a new dwelling can be zero-rated, subject to conditions.
- Energy-saving materials: installing listed energy-saving materials in homes, including insulation, draught stripping, heating controls, solar panels, heat pumps and (since February 2024) batteries, is zero-rated until 31 March 2027. From 1 April 2027 the rate is due to return to 5%.
- The relief applies to the installation and materials supplied by the installer, not materials you buy separately.
Practical tips
- Check whether your builder is VAT-registered, and ask for VAT to be shown separately on quotes and invoices.
- If you think a reduced or zero rate applies, raise it before the work starts. It is the builder who charges the correct rate.
- The rules have conditions and exceptions. For anything significant, check the HMRC guidance or speak to an accountant.
Next steps
Compare local builders, and read what to include in your contract, including how VAT is shown.
Last updated: 14 October 2026
