UK plans a VAT zero rate on land sold to housing associations from 1 April 2027
This change is proposed and is not law. The rules below describe what would change if it is adopted.
This page records one dated change. For the rules in United Kingdom as they stand today, see the United Kingdom guide →
- Jurisdiction
- United Kingdom
- Tax
- VAT
- Change type
- Rate change
- Status
- Proposed
- Impact
- Watch
- Announced
- 28 October 2026
- Effective
- 1 April 2027
- Authority
- HM Treasury / HMRC
- Systems
- Tax engine
- Verified
- Fetched from official source · high confidence
Sellers of land to registered social housing providers (relevant housing associations), and the housing associations buying it.
No action — monitoring only.
Tax engine
The UK government will lay secondary legislation in early 2027 to introduce a new zero rate of VAT on the sale of land to registered social housing providers (relevant housing associations), taking effect from 1 April 2027.
What changed in detail
This is an announcement, not yet law. At Budget 2026 (28 October 2026) the UK government said it will lay secondary legislation before Parliament in early 2027 to bring in a new zero rate of VAT on the sale of land to registered social housing providers (relevant housing associations). The government states the change will take effect from 1 April 2027.
A consultation on the measure was announced at Budget 2025; the government says the summary of responses is being published at Budget 2026.
What it means
Housing associations mostly cannot recover VAT, so standard-rated land (where the seller has opted to tax) is a real cost to them. A zero rate removes that cost while letting the seller keep input-tax recovery. Land deals with housing associations that complete around April 2027 should be timed and priced with this in mind, but the definitions (what counts as land, which providers qualify) depend on the order, which has not been laid yet.
Proof
As announced at Budget 2026, the government will lay secondary legislation before Parliament in early 2027 to bring into effect a new zero rate of VAT on the sale of land to registered social housing providers (relevant Housing Associations). This change will take effect from 1 April 2027.
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