Self and Custom Build Homes VAT Survey 2019 - Your Help is Required

Compiling data on the number of VAT exemptions helps NaCSBA identify how many people have self built over the years. Together with other statistics, such as information on the number of single dwellings created per year, this gives an estimate of the number of self builders in the country.

This then helps inform NaCSBA's work of campaigning for change and lobbying governments in all four UK countries to create more opportunities in the sector – both for businesses and would-be self builders. The more people that are building, the more new opportunities will come to market.

From 2019 calculating the size of the sector will be easier, as there is now a question on the form you must submit to apply for planning permission (1APP), which will help gather this data. However, for earlier years we need to compile this data retrospectively – which you can help with.

The survey is anonymous – it’s just nine questions, but it makes a huge difference to the work we do as an organisation, helping us to make custom build and self build more of a mainstream choice for more people. It closes on 30 November 2019. Andrew Baddeley-Chappell, CEO, National Custom and Self Build Association, said:-

Self Build Market size
Using a range of data, including VAT returns, single dwelling data, and other information, NaCSBA’s previous estimate of the Self Build market (2017) was that it stood at around 13,000 homes, although this figure could easily be conservative, and it believes the current market to be larger.

The UK market is much smaller than in many other European countries, where self build often creates around 50% of all new homes. NaCSBA sees self and custom build as making a valuable contribution to help the Government meet its target of 300,000 homes per year by the mid-2020s.

Even at 13,000, the market is still a major route for new housing supply nationally, for example, Barratt Developments completed 17,579 homes in 2018, according to its annual report. By volume this makes self build an important contributor. Tracking the size of the market will become easier in the future due to the 1APP planning form now including boxes for self builds and custom builds. Find out more about the new 1APP form here

VAT and self build
The sale of new dwellings is zero rated for VAT in the UK. The sale of eligible labour and materials used in the construction of a new dwelling is therefore also zero rated for VAT. Self Build projects are eligible for VAT exemption, but they must create a new dwelling, that is for you to use as your own home. They must also be lawful and evidence of completion must be provided. Conversions are also eligible for VAT reclaims, but at a rate of 5 percent. The rules for reclaiming VAT are strict – you must follow set procedures, and only file one claim, within three months of completion. Find out more about VAT here

The ‘Right to Build’
This places two legal obligations on Local Authorities in England:

1. Under the Self-build and Custom Housebuilding Act 2015 all Local Authorities in England must keep a register of people and groups of people who are seeking to purchase serviced plots of land in the authority’s area and to have regard to that register when carrying out their functions. Registers were required from 1^st April 2016.

2. The Housing and Planning Act 2016 requires all Local Authorities in England to grant sufficient ‘development permissions’ to meet the demand for Custom and Self Build housing in their area, as established by their register, on a rolling basis. Permissions equivalent to the number of people registering from 1^st April 2016 to 30^th October 2016 should be granted by 30^th October 2019. Permissions equivalent to the number of people registering from 30^th October 2016 to 30^th October 2017 should be granted by 30^th October 2020 and so on. This includes 18,000 permissions by 30^th October 2019.

The obligations are set out under primary legislation, secondary regulations and supported by MHCLG Guidance. As of October 30, 2018, there were 40,000 people in total signed up to the registers across England.

Find out more and register here

About NaCSBA: The National Custom and Self Build Association (NaCSBA) is the voice for the Custom and Self Build industry across the UK. Its vision is to make custom and self build a mainstream choice for all those seeking a home of their own. More details about NaCSBA can be found here