From 1 January 2008, renovation or alteration works to a residential property will qualify for the reduced VAT rate (5%), if the property has been unoccupied for at least 2 years.
The present limit is 3 years. By reducing the time limit from three years to two years, the number of empty homes will decrease. The Chancellor argues that a 2 year limit would continue to focus the main benefit upon properties that are unoccupied because they are outside the existing stock of useable homes, rather than those which are unoccupied merely because of short term factors - such as the property changing hands, lengthy purchase chains etc.
This is a step in the right direction, although I look forward to the day when the 5% reduced rate applies to all houses in need of renovation, whether empty or not.