Self-Build Loan Fund

Scottish Self-Build Loan Fund extended for a year

The Self-Build Loan Fund provided by the Scottish Government and administered by the Communities Housing Trust has been extended for another year, and will now accept applications until August 2022.

As banks became more cautious, it became more challenging for people to find funds to build their own home. The Self-Build Loan Fund of £4 million was established in 2018 to support those unable to obtain mainstream self-build mortgage finance.

Scottish ministers have now extended the Fund for a further year, recognising the national slowdown brought about by the Covid pandemic and lockdowns, as well as ongoing need and increasing demand. The new application deadline is 31 August 2022, with loans to be repaid by August 2023.

Neil Walker, Self-Build Loan Fund Officer, Communities Housing Trust: “We saw public interest in the scheme rise by 153% over 2020. The Fund is really important for small, rural or remote communities across Scotland. Self-build is sometimes the only option to stay in your own community, whether young or old, where housing is limited and developers won’t build. We’d like to thank the Scottish Government and are extremely pleased to see this Fund extended, so we can continue to support families, elderly people, crofters and couples to build their own homes, and help strengthen their communities.”

Gary and Susan, Self-Build Loan Fund recipients: “The Self-Build Loan Fund provided vital bridging finance. Having the loan also meant that we could pursue the build quickly, within the limited construction window available due to island weather… The Fund provides vital access to finance and knowledge, making the personal dream of home ownership available to local families.”

For more information about the Self-Build Loan Fund, and to apply, please visit: www.chtrust.co.uk/scotland-self-build-loan-fund

First-time mortgages rise

N‘ ew mortgages to first-time buyers in Scotland increased by an annual 43.2 per cent in the fourth quarter of 2020, while new mortgages to home movers increased by 26.7 per cent. Across 2020 as a whole, new mortgages to first-time buyers decreased by 12.3 per cent compared to a fall of 17.8 per cent for home movers.’ – UK Finance

Data shows that the continuation of the rebound in housing market activity in last quarter of 2020 was experienced across Scotland.

The largest increase in residential property sales occurred in

Aberdeen, Aberdeenshire and Moray, where sales rose by an annual 34.6 per cent. Sales in Argyll and Bute and the Highlands and Islands increased by the lowest amount in Scotland in the same quarter but this remains a sizeable increase in transactions, up by 21.6 per cent on the same period last year.’ – Registers of Scotland

ON THE REBOUND ‘

Get your VAT back

Two of the nicest words in the English language you will ever hear when used together: ‘tax refund’.

When you self-build or convert a property you can reclaim a substantial part of the VAT, Value Added Tax, you have paid during the process.

New builds are ‘zero-rated’. This means your builder should not charge you VAT for any work done because they can claim it back themselves later.

When building a new home you can reclaim some of the VAT paid during the process if the property meets the necessary criteria.

A brand new home on an empty plot is eligible as long as it is separate and self-contained, for you and your family to live or holiday in and not for business purposes; but you will be pleased to know that you can make one room a home o ce.

With conversions of existing properties the test is that it must previously have been for business-use only and a completely non-residential building. OR a residential building not lived in for more than 10 years; you must have documented proof. Conversions of buildings that cannot be sold or used separately from another building because of planning permission are NOT eligible.

The government rules say you can claim VAT back on building materials used to form part of the building that cannot be removed ‘without either using tools or damaging the building in the process’. Think fitted kitchens and wood flooring; paint, solar panels and burglar alarms.

VAT cannot be claimed back for items not permanently attached to the building itself - some electrical and gas appliances, carpets or garden ornaments.

Architects’ and surveyors’ fees and the cost of hiring machinery or equipment do not qualify.

When it comes to the claim it must be done within three months of completion and can only be done once – make sure you have claimed for everything because there is no second chance.

There are two types of forms, one for new builds, the other for conversions; you will need to supply all the necessary bills and invoices plus proofs of the work being completed. Each form comes with a guide.

Follow the rules and act promptly and it will all go smoothly or hire a professional to handle the claim for you if you know that paperwork is not your strong point.