Renovate vs new build and saving VAT

[Stonehouse]

Interested to know peoples experiences on either renovating / extending a property vs demolishing and new build saving VAT

 

From my understanding new builds will have stricter building standards that need to be met vs renovating 

 

So which turns out more cost effective. My builder/ architect designer are siding towards renovating/ extending 

[Gus Potter]

24 minutes ago, Stonehouse said:

Interested to know peoples experiences on either renovating / extending a property vs demolishing and new build saving VAT

 

From my understanding new builds will have stricter building standards that need to be met vs renovating 

 

So which turns out more cost effective. My builder/ architect designer are siding towards renovating/ extending 

Good question.

 

Yes, new builds partucularly in Scotland have a more onerous set of regulations in terms of compliance.

 

In terms of cost here is something I do.

 

I have a Client who is a property developer. They target bungalows at the end of a street. There are a lot of streets in Scotland that have two storey houses with bungalows parked at each end. The idea was that you had families living in the two storey houses and the granny / grandad lived in the bungalow at the end of the street.

 

Last week we looked at one, this threw up 4 initial options that ranged from renovating, extending side ways and upwards, splitting the plot for two houses or doing two semi detached two storey houses. My Client is going to make an offer next week on the property.

 

Now the demolition and rebuild option saves the vat and potentially there is money to be made if we build new... but that carries a serious planning risk and there is a delay factor when dealing with planning.

 

To be sensible we look at..  can we make money / at least break even by renovating or extending sideways.. that is the back stop position.. you don't want to loose you shirt.

 

If we get the property how hard a fight are we going to have with the planners and what are we going to find that is a risk (as an SE I know there is a bit of a settlement problem in this area for example).. on the upside once we get our hands on it we can then decide what to do.

 

To answer your question.. each project is different so there is no difinitive answer.

 

I would interrogate your Architect / Builder further and make an evidence / risk based decision. The BC  regulation compliance is probably further down the list. Funnily a lot of the building regs are really good for you and help you get a good quality house that will hold it's value.

 

 

 

 

[joe90]

1 hour ago, Stonehouse said:

Interested to know peoples experiences on either renovating / extending a property vs demolishing and new build saving VAT

I think, particularly on this forum, it depends if you are doing it for the money or wanting a house of your dreams. I have renovated houses all my life but hankered for building my own, my design, my input and very comfortable. Luckily I was able to achieve this when I retired using the money from my previous renovations. I found a new build soo much easier and gratifying than renovating, yes more rules to adhere too but because of my yearning for an energy efficient build I built in excess of the “rules” anyway. Luckily I was not constrained (much) on budget but my sense of achievement will last me the rest of my life and cannot be taken away from me. 

[Gus Potter]

24 minutes ago, joe90 said:

but my sense of achievement will last me the rest of my life and cannot be taken away from me. 

That is the reward spelled out in a nutshell.

 

You get a very deep and long lasting satisfaction from it, you don't need to broadcast it as others can see what you have achieved when they visit.. your hard work will speak for itself. 

 

You just know you have done something few folk can do. It is your castle, home and unique.

 

 

 

 

 

 

 

 

 

 

[Stonehouse]

Thanks for the comments.

 

My plans will end up probably leave 1 wall untouched which is an party wall and complete new roof throughout. So will almost be a new build in reality.

 

Other walls will be moved, bigger glazing opening etc. 

 

New build- would need to bring at down except party wall. Stone would salvageable  but added cost of removing and rebuild. Extra requirements for new builds . But save VAT

 vs

 

 Remodel which wouldn’t need to knock all down so save costs here. Wouldn’t necessarily need to meet all new build requirements where not necessary. However pay VAT

 

Do i work this out myself with builder or need to get quantity surveyor involved?

 

 

[Conor]

Trust me, you want to meet the "stricter" standards of a new build, you'll end up with a much nicer, warmer, future proof home.

[joth]

Yes a new build may have some stricter building regs standards in places, but in the big scheme it is unlikely to cost noticeably more vs the extra labour in constantly working around what is already there.  Hard stuff like digging new foundations you'll probably find are just as strict on your renovation as on the rebuild.

For some reason a lot of the construction industry view regs as the enemy, like how many view a speed limit on a motorway, to be pushed as near as possible or even over step do long as you don't get caught. It's a false economy for you as client to take on that same mindset as it'll just give a worse quality build that costs more to live in. If you bought a "new" car with half bold tyres that barely scrapped the MOT and obsolete radio you'd feel totally ripped off, so I'm not sure why people have that opposite attitude to house building that's so so much bigger and more important investment 

 

Have a read of this thread for more examples of how cutting corners on regs can backfire. 

 

 

Edited September 17, 2023 by joth

[Hastings]

I am renovating and will get VAT refund because it's been unoccupied for more than 10 years.

 

I decided to renovate, not demolish and rebuild, because I felt it my duty to reduce the carbon footprint.

[iMCaan]

On 17/09/2023 at 12:11, joth said:

Have a read of this thread for more examples of how cutting corners on regs can backfire. 

 

@joth I like to make it clear that we (builders or I) did not cut corners on building regs. The builder called out the building regs. officer (local council) at agreed stages. Furthermore, I too called him out to discuss, which he told me were non building regs. issues.

On his first visit. I remember asking him to be as strict as possible with applying building regs. knowing that his recommendations/suggestions would be good for the build. I remember him saying that a building either complies with building regs. or it doesn't. 

 

He did ask us to fit steel catnic lintels on top of the first floor bay windows to accommodate a wall plate to achieve the angle of the pitched roof. It seemed like an overkill as it hardly took any weight but we complied. I had to get structural engineer involved and the catnic lintels had to be fabricated on site. Cost me a lot of money and over 2 months delay.

 

I'm an inexperienced self builder. Had he highlighted any other building regs. issue, we would have complied. 

 

 

[joth]

4 hours ago, iMCaan said:

 

@joth I like to make it clear that we (builders or I) did not cut corners on building regs. [...]

 

 

Sure, so long as you're happy with it, you're the boss.

For my part, I have no idea how installing 50mm of insulation when the BCO approved designed called for 100mm (and regs themselves are now more like 150mm minimum) can be said to be complying with regs, and I would not accept it if it happened on my build, but you don't have to convince me, I'm not the BR police.

 

 

[puntloos]

As someone who played with this choice for about 3 years before we pulled the trigger on flatten+newbuild, I can give you my biased view that others might shoot holes in:

 

- VAT adds up, so yes, at a certain point and at a certain thoroughness of renovation it starts to make sense to do a newbuild. Haven't really figured out a universal rule of thumb but I suspect that if every room needs major work and you want to add a bunch of extra things/space then you quickly will be better off rebuilding. 

 

- I have no idea if renovating or newbuilding makes a major difference to the satisfaction, I do know that with newbuild there are 6fewer constraints which means you'll probably have more decision fatigue, as well as tons of choices where there simply isn't a 'right choice' ("should the mantle be sticking out further or less far than the hearth of a fireplace"). 

 

- Not too concerned about regs. Most of them are simply reflecting the 'direction' of innovation, and probably sane to follow. There are a bunch that are somewhat annoying and can trip you up, for example in my local area you have to have 27 meters between your 1st floor window and any existing 1st floor windows facing you, and in a tightly packet town that sometimes means you can forget about that 2 story extension for no good reason.

 

End of the day, I think both styles of project are great, the accent differences are what might sway you one direction or the other,

[PeterW]

On 17/09/2023 at 09:51, Stonehouse said:

My plans will end up probably leave 1 wall untouched which is an party wall and complete new roof throughout. So will almost be a new build in reality.

So that will allow you to claim VAT back as you are demolishing all but a single wall. 
 

How well do you know the neighbours..? And has your SE had a proper look at that party wall as I would want to make sure it was in very good condition before you end up one morning with your neighbours wardrobes in the middle of your site … 

[puntloos]

Just curious- What's the official definition of new build? 1 wall? How about 1 single wall and a petunia planter? 2 walls? Foundation?

[saveasteading]

51 minutes ago, puntloos said:

What's the official definition of new build?

I doubt there is an official definition, but perhaps there is case law on it.

 

I'd think that reusing foundations might be ok, and perhaps retaining a feature wall., but I wouldn't chance it, as the VAT people don't give advice but do impose retrospective charges and fines.