Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of VAT on incentives to refurbish void properties in the social housing sector.

The Government confirmed an initial £1.29bn of funding for the Warm Homes: Social Housing Fund 2025-2028 at the 2024 Autumn Budget. The Government will provide £13.2bn of housing retrofit funding to 2030, delivering our manifesto pledge.

Residential renovations are subject to a reduced rate of VAT of five per cent if they meet certain conditions. These include conversions of buildings from one residential use to another, conversions from commercial to residential use, and the renovation of properties that have been empty for two or more years.

VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. Exceptions to the standard rate have always been limited and balanced against affordability considerations.