• Options Available to Owners
• Incentives
• The Annual Cost of Owning an Empty Property in Malvern Hills

Options Available to Owners

Owning an empty home is costly but there are routes to bringing the property back into use so that it is no longer a burden.

Letting

If the condition of the property is liveable, you could let your property. You can do this yourself or through an established local letting agent. You may pay a fee to the agent to manage the property on your behalf if you wish for a more hands-off approach. If you decide to let the property yourself, it is important that you understand the law before you let to a tenant. Our Empty Homes Officer can provide you with further advice on this.

·    A list of estate agents with offices based in Malvern Hills District can be found here along with their contact details: Estate agents in Malvern Hills | Letting agents | OnTheMarket

Sale

If you prefer to sell the property, you can do so via an estate agent or a property auction. Auctions can be a quicker way of selling an empty home that needs renovating, as auctions attract investors and buyers interested in empty homes.

A list of estate agents with offices based in Malvern Hills District can be found here along with their contact details: Estate agents in Malvern Hills | Letting agents | OnTheMarket

Guardianship

Guardian finding companies will offer to move someone into an empty property so that it remains secure and avoid it from becoming damaged overtime due to lack of heating. Please read more on the GOV website by clicking Property guardians: guidance - GOV.UK

Incentives:

Malvern Hills District Council has launched a new loan scheme to help bring empty homes back to life. If you own a long-term empty property, this initiative offers financial support to help with renovation required to bring the property back into use.

VAT Reduction Scheme

To request a VAT Reduction Notice Letter from our Private Sector Housing Team, please email This email address is being protected from spambots. You need JavaScript enabled to view it. 

Renovating a residential property that has been empty for 2 or more years or converting a single dwelling into multiple dwellings can attract a 5% reduced rate of VAT on works required to bring the property back into use.
Where conversion and / or renovation works are required, and the services and any goods provided as part of the construction service are incorporated into the fabric of the building, you can request that the supplier charges VAT at the reduced rate of 5% instead of the standard 20% rate.

Where the 5% rate of VAT applies:

• Renovation of dwellings which have been empty for at least 2 years—Wychavon District Council can evidence this in writing via the Empty Homes Officer.
• Conversions involving a change in the number of dwellings such as turning a house into flats or vice versa.
• Conversions of commercial property to residential.

What services the 5% rate of VAT can apply to:

• The fabric of the building such as walls, roofs, floors, windows and doors.
• The means of providing water, power, heat or access to the building (where carried out within the immediate site).
• The means of providing drainage, security or waste disposal for the building (where carried out within the immediate site).
• Importantly, the 5% can apply to the building materials if they are being provided alongside this service.

Where the 5% rate does not apply:

• The hire of goods & tools.
• Landscaping.
• The supply/erection of scaffolding.
• Materials purchased directly from the builder’s merchant.
• The installation of goods that are not building materials (e.g., carpets and fitted bedroom furniture).
• Professional fees of architects, lawyers, surveys, etc.

VAT and the installation of certain energy efficiency measures

In addition,  reduced rates of VAT apply to a number of types of building works, such as installing energy saving measures, adapting a building for a disabled person or works to convert a non residential building into a home. A reduced VAT rate applies to the installation of certain specified energy-saving materials in residential accommodation. The reduced rate applies to installation of:

• Central heating and hot water controls
• Draught stripping
• Insulation
• Solar panels
• Wind Turbines
• Ground source heat pumps
• Air source heat pumps
• Micro combined heat and power units; and
• Wood-fuelled boilers
• For more information is available from the HMRC - Energy-saving materials and heating equipment (VAT Notice 708/6) - GOV.UK

Non-residential properties empty for ten years or more

A developer or house owner can claim back all VAT charged on the renovation of a building that has been empty for 10 years or more, once the dwelling is sold. If the house owner retains the property for private residential use, they can make a claim for the VAT under the DIY Builders Refund Scheme available from Customs and Excise.

A ‘non-residential conversion’ is considered to take place when either:- the building (or part) being converted has never been used as a dwelling or number of dwellings for a ‘relevant residential purpose’, or in the 10 years immediately before the sale or long lease the building (or part) has not been used as a dwelling or number of dwellings or for a ‘relevant residential purpose’

The building must be converted into a building either ‘designed as a dwelling or number of dwellings’ or intended for use solely for a ‘relevant residential purpose’. Details of what constitutes a “relevant residential purpose” can be found on the HMRC website www.hmrc.gov.uk VAT notice 708 paragraph 14.6 - Buildings and construction (VAT Notice 708) - GOV.UK.

Examples of a ‘non-residential conversion’ include the conversion of a commercial building (such as an office, warehouse, shop), an agricultural building (such as a barn), or
a redundant school or church, into a building ‘designed as a dwelling or number of dwellings’. The conversion of a garage, occupied together with a dwelling, into a building designed as a dwelling is not a non-residential conversion.

You may be required to show that that the building has not been lived in during the 10 years immediately before you start your work.

Proof of such can be requested from Wychavon District Council’s Empty Home Officer or possibly obtained from Electoral Roll and utilities companies, or any other source that can be considered reliable.
A letter from our Empty Property Officer certifying that the property has not been lived in for 10 years or more normally does not require any additional accompanying evidence.

New dwellings

New dwellings carry 0% VAT for construction, eligible labour and materials—HMRC notice 708. If you are not VAT registered (self build) you can make a one‐off claim for the refund of VAT on eligible materials using HMRC notice 431C.

Should you require any further guidance, then please contact your local Empty Property Officer.

To request a VAT Reduction Notice Letter from our Private Sector Housing Team, please email This email address is being protected from spambots. You need JavaScript enabled to view it. 

*Important Notice:

The information provided on our website is generic in nature and aims to show some of the options available to owners of empty homes.
Readers should not rely on this information and are recommended to seek professional advice on VAT for their personal and business matters.

This does not include potential costs to repair penetrating damp walls, hidden leaks and other risks associated with empty property such as property fraud or damage from ASB.