A consultation has been launched seeking views on the potential introduction of a new zero rate of VAT for the sale of land intended for the construction of social housing. See VAT treatment of land for social housing - GOV.UK
At the moment, although housing associations have the ability (using VAT1614G Certificate) to disapply a seller's option to tax on the sale of land to them to be used for the purposes of constructing social housing, doing so results in the transaction being an exempt supply by the seller leading to a potential clawback of VAT previously recovered by them and inability to recover VAT on the professional costs incurred in relation to the sale. This has led to the use of “golden brick” arrangements whereby the landowner (or developer who has acquired the land) will construct to above foundation level (the golden brick stage) before transferring title to the social housing provider to benefit from the zero rating on the sale made in the course of construction of a building for a residential or charitable purpose.
The revised proposal would avoid the need for such arrangements. In terms of administration one of the proposals being put forward is for the registered social housing provider to provide a certificate to the seller, potentially supported by specified documentary evidence. They would also be required to inform HMRC of any relevant changes in the use of the land following the sale to them.
Responses should be submitted by 18 August 2026 via online form, or by email to vatlandforsocialhousingconsultation@hmrc.gov.uk, or by post to:
VAT and Excise Team
HM Treasury
1 Horse Guards Road
SW1A 2HQ
