VAT, landowners and social housing: No more Golden Brick in the Wall

• 28 October 2026
• Uncategorized

Change to take effect for transactions on or after 1 April 2027 

Social housing providers should be pleased that in the 2026 Budget the Government has chosen to implement changes which will mean that supplies of land to registered social housing providers (RSHs) will be zero-rated for VAT purposes. 

Zero-rating is something of the “Holy Grail” of VAT. It allows (in this instance) a landowner to recover allowable input VAT incurred on the costs of making the supply, while meaning that the buyer does not have to either: 

(a) suffer a VAT charge which, in the case of an RSH, may be irrecoverable; or 

(b) delay completion of the purchase until the development has reached the so-called “golden brick” stage. 

We agree with the Government’s view that the measure should support earlier transfers of title, reduce reliance on staged transactions and complex contractual chains, and ultimately accelerate the delivery of new social housing. 

Landowners and developers should also welcome the change. Removing the need to wait for golden brick should allow transactions to complete, and sale proceeds to be received, earlier. 

Nor should the Exchequer necessarily lose out. Many transactions are currently structured using golden brick precisely to avoid an irrecoverable VAT cost. Earlier completions may also mean earlier tax receipts arising from disposals. 

So, from April 2027, there may finally be one less brick in the wall of delivering social housing. 

The draft legislation will of course have to be considered in detail when it is published as undoubtedly (and quite correctly) there should be anti-avoidance rules. 

If you have any queries regarding VAT or other property taxes, please do not hesitate to contact a member of our team.