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What VAT rate applies to building work in Ireland?

Most construction services supplied to a homeowner are charged at the reduced rate of 13.5 per cent, while many materials bought separately carry the standard rate of 23 per cent. The two-thirds rule can change the rate where materials dominate the contract value.

Under the two-thirds rule, if the cost of goods supplied in a service contract exceeds two-thirds of the total charge excluding VAT, the whole supply is charged at the standard rate. This is why a builder supplying and fixing high-value materials may quote 23 per cent on part of the job.

Between VAT-registered construction businesses, the reverse charge applies and the subcontractor does not charge VAT. That does not apply where the customer is a private homeowner.

Budget implications

  • Confirm whether quotes are inclusive or exclusive of VAT
  • Buying materials yourself often means paying 23 per cent
  • A self-build homeowner generally cannot reclaim VAT
  • Check the rate quoted matches the service being provided

Sources

Last reviewed 28 August 2026. General information only — not legal or planning advice.

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