Changing 'golden brick' VAT rules to accelerate affordable housebuilding

We are supporting calls from across the housing sector to amend VAT legislation related to the 'golden brick' provision.

This change, also backed by the Chartered Institute of Taxation, could accelerate affordable housebuilding at no additional cost to the taxpayer.

Under current VAT rules, land can only be zero-rated once construction reaches the ‘golden brick’ stage - a point in the process where a building is deemed to be 'clearly under construction', for example, foundations or the first level of bricks have been laid.

This introduces delays, complexities and additional costs into the development process.

These inefficiencies could be overcome through a simple change to VAT rules: zero-rating the sale of land to a registered provider of social housing where outline planning permission exists for the construction of affordable homes.

This would move the point at which the existing zero-rate provisions can be accessed forward at no additional cost to the Exchequer, enabling earlier access to grant and simplifying contracting to accelerate home building.