VAT on the construction of Student Accommodation

Construction of student accommodation

Construction of student accommodation needs to be carefully planned to avoid incurring large irrecoverable VAT costs.

The cost of construction of student accommodation may be relieved of VAT but using the accommodation for other purposes outside of term time can invalidate the relief. It’s possible to use another zero-rating provision to avoid a VAT cost, but that has its own strict conditions. So construction is an area that needs to be considered in-depth as an unexpected 20% additional cost can make such projects financially unviable.