Article Summary
This guidance note provides information on the VAT treatment of buying and selling relevant residential purpose buildings in the UK. It explains what qualifies as a relevant residential purpose building and when the zero rate of VAT can apply to the sale of such buildings. The zero rate can apply to the first major interest grant of a newly constructed, converted, or substantially reconstructed relevant residential purpose building by a business with the relevant status, provided the buyer provides a certificate confirming the building will be used solely for a relevant residential purpose. Relevant residential purposes include use as a care home, student accommodation, children's home, armed forces accommodation etc. Strict conditions apply for the zero rate to apply, particularly for converted buildings where historic use must be considered. Outside the scope treatment can apply if sold as a TOGC or between VAT grouped entities. If conditions for zero rating or outside scope are not met, sale of a relevant residential purpose building is generally exempt.