On 23 June 2026, the government published a consultation document seeking views on the introduction of a new zero rate of VAT for the sale of land intended for the construction of social housing.  

The government hopes that this measure will “simplify and accelerate the construction of social housing” by addressing issues with the current “golden brick” approach. The consultation is part of the government’s wider strategy to deliver 1.5 million new homes over the course of this Parliament.

The government believes that the introduction of a new zero rate of VAT will enable relevant registered housing providers to purchase and take title of bare land to be used for the construction of social housing without having to wait for the golden brick stage. 

In its response to the consultation (ICAEW Representation 58/26, see further information, below), ICAEW supports and makes several recommendations for the introduction of a “well-designed” and “targeted” VAT relief for land acquired for the construction of new social housing. In particular, any new relief should minimise compliance burdens for businesses and HMRC, for example, by building on existing VAT concepts and certification mechanisms wherever possible and operate consistently across all four nations of the UK.  

ICAEW has also cautioned against expecting the relief to deliver more than it can. Members’ experience is that the golden brick approach is a source of cost, friction and delay rather than a barrier to delivery, and that the principal constraints on social housing supply lie elsewhere. Although the relief is worth pursuing to remove real and quantifiable friction, it should not be oversold as a measure that will, by itself, materially increase housing supply.