My client is a VAT registered building contractor who has been asked to renovate a dwelling that has been empty for 17 years. The customer acquired the dwelling in August 2021 and no work has been carried out, but they moved into the property in January 2022. Can my client apply the reduced rate of 5% to the renovation works which he is about to commence?

Where work is carried out to an eligible dwelling that has not been lived in during the two years immediately before the work starts the reduced rate of 5% can be applied. VAT notice 708 Section 8 sets out the conditions that must be met.