VATGPB8315 - Other local authority activities: housing and community projects: background to housing stock transfers

It is Government policy to require local authorities to look at a range of investment options to bring their housing stock to the Government’s ‘decent homes standard�. One of these options is for stock to be transferred to registered social landlords (RSLs) subject to residents being balloted and agreeing to the proposal.

»Ê¹ÚÌåÓýapp transfer of housing stock is a non-business activity by the selling local authority. However, this does not apply to commercial properties, shops, garages for non-residents and residential or other properties bought for investment purposes, to which the normal rules apply.

Housing stock transfers can take one of two forms. »Ê¹ÚÌåÓýapp RSL either:

  • purchases the housing stock in its existing condition at a price that reflects the condition, with any refurbishment funded by the RSL, or
  • it agrees to purchase the housing stock on condition that the local authority undertakes outstanding routine maintenance and ‘catch-upâ€� works, with the price paid reflecting the work that the local authority is bound to undertake.

»Ê¹ÚÌåÓýapp two arrangements lead to very different VAT consequences (see VATGPB8320 and VATGPB8325).