The DIY Housebuilders Scheme is a government programme that allows individuals who are building their own homes or converting non-residential buildings into homes to reclaim VAT on eligible building materials.
This can help those renovating or building a house recoup vital funds that they were not required to pay VAT on as long as they make their claim in time and their project qualifies.
As of December 5th 2023 the scheme will bring significant changes such as extending the deadline for applicants from three months after the project is completed to six months as well as digitising the application process to make application forms paperless.
In our guide for the scheme we run you through who or what can qualify for a refund, how much VAT you can claim back and how you can apply.
Who can apply for the DIY Housebuilders Scheme?
The scheme is available to anyone building a home for personal, non-business use, mainly as their own residence.
The scheme is not limited to those constructing entirely new homes. It also applies to those who:
- Convert non-residential buildings, like offices or churches, into a home for personal use.
- Renovate a residential building empty for over ten years for private use.
While constructing a house typically means starting from scratch, converting or renovating a house that requires planning requirements is also eligible for a claim.
How much VAT can I reclaim?
Make sure you're charged the correct VAT rates for all your self build project costs.
It's crucial to get this right because HMRC won't refund incorrectly charged VAT on a new build.
For self builds, conversions, and renovations bringing a house unused for 10 years back into use:
- Materials-only supply is at the standard 20% VAT, recoverable through the scheme.
- Labour-only or joint supply of labour and materials should be at 0% for new builds and 5% for conversions/renovations. You can reclaim 5% VAT on eligible joint supply at the project's end.
How long do you have to make a claim?
Claims previously needed to be made within three months of the project being completed but can now be claimed six months from the completion date of the build.
What goods can and can't be claimed on?
You may only claim for building materials that are considered 'incorporated' in a building. This occurs when work:
- requires the use of tools
- results in either the need for remedial work to the fabric of the building (or its site), or substantial damage to the goods themselves
|Good that can't be claimed on
|Good that can be claimed on
|Agas or range cookers, unless they are solid fuel, oil-fired or designed to heat space or water
|Free-standing and integrated appliances such as: cookers, fridges, freezers, dishwashers, microwaves, washing machines, dryers, coffee machines
|Bathroom accessories, such as fixed towel rails, toilet roll holders or soap dishes
|Audio equipment (including remote controls), built-in speakers, intelligent lighting systems, satellite boxes, freeview boxes, CCTV, telephones
|Building materials that make up the fabric of the property (for example, bricks, cement, tiles or timber)
|Consumables (for example, sandpaper, white spirit)
|Burglar and fire alarms
|Electrical components for garage doors and gates
|Curtain poles and rails
|Garden furniture and ornaments and sheds
|Dust extractors and filters
|Bedroom and bathroom furniture
|Fireplaces and surrounds
|Curtains, blinds and carpets
|Fitted kitchen furniture as well as kitchen sinks, work surfaces and fitted cupboards
|Row 9 - Cell 0
|Flooring materials (other than carpets and carpet tiles)
|Row 10 - Cell 0
|Heating systems including radiators and controls, underfloor heating, ducted warm-air systems, storage heaters and other wired-in heating appliances, gas fires, boilers, immersion heaters and solar-powered heating
|Row 11 - Cell 0
|Plumbing materials, including electric showers and 'in line' water softeners
How to make a claim?
In order to submit the VAT reclaim form you will need to:
- Include the building regulation completion certificate
- Provide evidence of planning permission
- Invoices are no longer necessary for an application
Claimants may only make a claim once the build has been completed.
Claimants also have the option to file claims for a VAT refund under the scheme digitally from the 5th of December 2023, whilst paper-based claims will still be an option.
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News Editor Joseph has previously written for Today’s Media and Chambers & Partners, focusing on news for conveyancers and industry professionals. Joseph has just started his own self build project, building his own home on his family’s farm with planning permission for a timber frame, three-bedroom house in a one-acre field. The foundation work has already begun and he hopes to have the home built in the next year. Prior to this he renovated his family's home as well as doing several DIY projects, including installing a shower, building sheds, and livestock fences and shelters for the farm’s animals. Outside of homebuilding, Joseph loves rugby and has written for Rugby World, the world’s largest rugby magazine.