When budgeting for your renovation or conversion make sure you take into account all the taxes you will need to pay

VAT

Unfortunately, in the UK, renovation works to existing properties are liable to pay VAT at 20 per cent.

Capital Gains Tax

As long as you don’t use your Principle Private Residence for business purposes (except working from home) you are exempt from CGT. However, if you have a workshop or office in any part of your property that will be taxed. Additionally, any profit made on principle and private residence is free from Capital Gains Tax.

Property and plot purchases are taxed in relation to their sale price.

£0 - £175,000 - 0% (until September 2009 inclusive)

Council Tax

The rate of council tax you will have to pay relates to the value of the property as assessed by the council’s surveyor.

Useful Contacts

Tax information: Self build ABC www.selfbuildabc.co.uk
Stamp duty and land tax: Direct.gov www.direct.gov.uk