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Zero-rating supplies of building materials

The VAT treatment of land and property is one of the most complex areas of the VAT legislation. Under certain situations, supplies of building materials can be zero-rated or reduced-rated at 5% for VAT.

For the supplies of building materials to be zero-rated or reduced-rated, all of the following conditions must be met:

For VAT purposes, ‘building materials’ are articles that meet the statutory definition namely the materials:

If a builder is working on a zero-rated project, they can still zero-rate the service of incorporating standard-rated goods in the building. But if they are working on a reduced-rated project, they cannot reduced-rate the incorporation of standard-rated goods that are not building materials.

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