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<p>The construction of certain new-build properties, including residential buildings,
is subject to a VAT zero rate to encourage the construction of new homes. A reduced
rate of VAT at five per cent is also maintained, subject to certain conditions, for
residential renovations. This includes conversions of buildings from one residential
use to another, conversions from commercial to residential use, and the renovation
of properties that have been empty for two years or more.</p><p> </p><p>Extending
this VAT relief would impose additional pressure on the public finances to which VAT
makes a significant contribution. As such, the Government has no plans to introduce
a VAT relief on the renovation and restoration of existing homes; however, the Government
keeps all taxes under review.</p><p>A temporary zero rate (up to April 2027) also
applies to installations of qualifying energy saving materials, such as insulation,
solar panels and heat pumps into residential accommodation. This relief is targeted
at materials that specifically improve the energy efficiency or reduce carbon emission
from a residential property.</p><p> </p>
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