VCONST14220 | Dwellings - an explanation of terms: what ‘designed as a dwelling or number of dwellings’ means: holiday accommodation

For the purposes of the zero rate, a ‘holiday home’ is a building designed as a dwelling or a number of dwellings where residency throughout the year or use as a principle private residence is prevented.

The use of a dwelling as a ‘holiday home’ doesn’t affect the liability of construction services: they are zero-rated if the building meets the conditions of being designed as a dwelling or a number of dwellings.

Such a holiday home is also eligible for the DIY Builders and Converters VAT Refund Scheme, following the decision in Mrs Irene Susan Jennings (TC00362). However, the first grant of a major interest in such a dwelling can’t be zero-rated.