You have a quote in front of you. Somewhere near the bottom there is a VAT line, or there is not, or there is a note saying "VAT extra" and no number at all. The advice everybody repeats is that building work is 13.5%, so a 23% line must be a mistake.
It is not necessarily a mistake. There is a rule that decides which rate applies, and on some parts of an attic conversion it pushes the whole transaction to 23%. This page sets out that rule from Revenue's own material, applies it to the kind of work an attic conversion is made of, and gives you the questions to put to your builder.
The short answer
Most of an attic conversion is construction services, and construction services carry the reduced rate of VAT, currently 13.5%. But if the cost of the goods used in carrying out the work is more than two-thirds of the total price - both figures taken excluding VAT - then the rate on the goods applies to the whole transaction, and that rate is 23%.
So the honest answer to "should this be 13.5% or 23%?" is that it depends on how the price splits between materials and everything else. A whole conversion almost never flips. A materials-heavy piece of it priced on its own - a supply-and-fit rooflight package, an insulation-only job - can, and legitimately.
13.5%
Reduced rate - construction services
23%
Standard rate - materials, fittings
Source: Revenue, current and historical VAT rates - the standard rate is 23% and the reduced rate 13.5%, both effective from 1 January 2025 (page published 1 January 2026). Read the rates table. That construction services take the reduced rate is stated in Revenue's Tax and Duty Manual, VAT treatment of construction services (document last reviewed August 2026), section 4.1 - both read 17 September 2026.
What this page is not
It is not tax advice, and we are not your accountant. What it is: a plain reading of what Revenue publishes, so that you can tell a wrong VAT line from a surprising but correct one, and so that when you ring your builder you already know which question to ask. Rates move - the reduced rate on construction services is exactly the kind of figure a budget can change - so every rate here carries the date we read it.
The two-thirds rule, and how to apply it
Goods usually come with a service. Revenue's example is parts in a washing machine repair; yours is insulation board in an insulation job. The two-thirds rule decides which of the two rates swallows the other. Revenue states it in two sentences:
"If the cost of the goods used in carrying out the work exceeds two-thirds of the total price, the rate which applies to the goods then applies to the entire transaction."
"If the cost of the goods used in carrying out the work does not exceed two-thirds of the total price, the rate which applies to the service then applies to the entire transaction."
Source: Revenue, "Services taxable at the rate of the goods (the two-thirds rule)", page published 20 August 2026. Read the page - read 17 September 2026.
Three things about that wording are easy to get wrong, and getting any of them wrong changes the answer.
Both sides of the comparison are VAT-exclusive
The materials figure and the total price are both taken before VAT. Revenue's own worked example labels them that way: a job quoted at "€300 plus VAT", with "cost of materials at 23% (VAT exclusive) €220". Compare a VAT-inclusive total against a VAT-exclusive materials cost and you will usually decide the rule does not bite when it does. This is the most common error in the commentary written about the rule.
It is the builder's cost of the goods, not a shop price
In Revenue's example the €300 is made up of €220 "cost of materials" and €80 "labour, overheads, profit". The margin sits in the second line, so the figure being tested is what the materials cost the person doing the work - not what you would pay for the same items over a merchant's counter. You will not normally be able to compute this yourself from the quote. You can ask.
When it bites, it takes the whole price with it
This is the part that surprises people. The rule does not put 23% on the materials and leave the labour at 13.5%. It applies the goods rate to the entire transaction - labour included. Revenue's example: materials of €220 out of €300 exceed two-thirds, so "VAT chargeable is €69 (€300 @ 23%)".
There is a second, quieter rule sitting behind it, and it is the one that decides whether a given line on your quote is even in the two-thirds conversation: Revenue splits goods that end up attached to a building into fixtures and fittings.
Fixtures are goods that have become so closely linked to or integrated into the building that they cannot be removed without substantial damage or significant alteration to the goods or to the building. Supplying and installing one is work on immovable goods, so it takes the reduced rate - but the two-thirds rule still applies to it.
Revenue's own list of examples is where an attic conversion mostly lives. It names, among others: attic insulation, attic ladders, windows, water tank, electrical wiring, recessed lights, doors, built-in units including built-in wardrobes, baths other than free-standing, sinks, storage heaters and radiators, boilers and central heating systems, wooden floors that are permanently fixed, and floor covering if it is stuck down.
Source: Revenue Tax and Duty Manual, VAT Treatment of Fixtures and Fittings, document last reviewed February 2026 - paragraph 1, section 1.1 and Appendix 1. Revenue notes the list is not exhaustive and is for guidance purposes only. Read 17 September 2026.
Read the fixtures and fittings manual or the summary page.
One conversion, priced both ways
Take a figure off our own cost page. A Dublin attic conversion with an ensuite runs €25,000 to €35,000 - our figures, Dublin, 2025/26, VAT included - and we set out how that band is built in the cost guide. Work the middle of it.
The whole job: 13.5%, and not close to flipping
A conversion at €30,000 including VAT (our figure, Dublin, 2025/26) is €26,431.72 before VAT, with €3,568.28 of VAT at 13.5%. Two-thirds of the ex-VAT price is €17,621. For this job to flip to 23%, the builder's cost of the materials would have to be more than that - roughly two euro in every three going into insulation, board, timber, glass and sanitaryware, with everything else covered by the remaining third.
A conversion is not built like that. It is joists, structural work, a staircase opening, first and second fix, plastering and a bathroom, and the labour content is heavy. This is why 13.5% is the ordinary answer on a whole-job quote, and why a 23% line on one is worth a question.
If it did flip, the same ex-VAT price would come out at €32,511 instead of €30,000 - the rule is worth about €2,511 on this job.
One package out of it: 23%, correctly
Now price a piece of it separately. Say a supply-and-fit rooflight package is quoted at €3,000 before VAT, and the windows, flashings and trims cost the builder €2,200 of that. Two-thirds of €3,000 is €2,000. The materials exceed it, so 23% applies to the entire €3,000: €3,690, where 13.5% would have given €3,405.
Those two numbers are arithmetic, not a price we are quoting you - the ratio is Revenue's own example proportions applied to an attic package, and we have no Dublin benchmark for a rooflight package on its own. What they show is the shape of the thing: the more of a price is glass and board rather than hours, the closer it sits to the line.
Two consequences follow, and they matter more than the arithmetic.
How a job is packaged can change its rate. The same rooflights installed as part of a whole conversion sit inside a price whose materials are nowhere near two-thirds. Split out as a standalone supply-and-fit order, they may not. That is not a trick and it is not avoidance - it is the rule working as written on two genuinely different transactions.
An insulation-only job is the one to watch. Insulating at rafter level with rigid PIR board is exactly the shape of work where material cost is high against the hours, and attic insulation is on Revenue's fixtures list. If you are doing insulation on its own rather than as part of a conversion - which is also the case where a grant is most likely to be live, and we cover that in our SEAI grants guide - do not assume 13.5%.
Reading the quote: inclusive, exclusive, and silent
Start with the uncomfortable part. A builder is not obliged to give you a VAT invoice. Revenue's list of customers an accountable person must issue one to runs: another accountable person, a Department of State, a local authority, a body established by statute, a person carrying on an exempt activity, and certain persons in other EU Member States. A private individual having their own house worked on is not on that list.
Source: Revenue, "Who must issue a VAT invoice?", page published 16 March 2026. Read the page - read 17 September 2026.
In practice most builders will issue one anyway and many quote VAT-inclusive as a matter of course. But if you want the breakdown, ask for it as a request rather than as an entitlement, and ask before you sign rather than after. Where a VAT invoice is issued, Revenue requires it to show, among other things, the VAT-exclusive unit price, the breakdown by rate of VAT, and the total VAT payable - so an invoice that shows a single lump with no rate is not one.
Source: Revenue, "What information is required on a VAT invoice", page published 16 March 2026. Read the page - read 17 September 2026.
The three quotes you will actually get
"€30,000 including VAT" - the number you hand over. Comparable with our figures, which are all VAT-inclusive.
"€30,000 plus VAT" - you will hand over €34,050 at 13.5%, or €36,900 if the two-thirds rule applies. A 13.5% assumption you have made yourself is a €2,850 assumption.
"€30,000", with nothing said - the dangerous one, because you and the builder may each be reading it the way that suits you. Get it in writing which it is before anything else is agreed.
Comparing quotes on a like-for-like basis is the same problem seen from the other side, and our guide to choosing a contractor deals with the rest of it. What the paper trail has to look like when you eventually sell is a different question again, answered in our certificates and compliance guide.
Buying your own materials usually costs you money
This is the most counter-intuitive fact on the page, and the one most worth acting on.
The instinct is sound: cut the builder's margin on materials by buying them yourself. What it does to the VAT is the opposite of what people expect, and it does it twice.
You pay 23% at the counter and cannot get it back
Building materials are standard-rated. Bought by you, they carry 23% and stay at 23%, because reclaiming VAT is something an accountable person does through a VAT return in respect of taxable supplies - and Revenue is explicit that VAT may not be reclaimed on goods used for non-business activities. Your own home is a non-business activity. Left in the builder's price, the same materials sit inside a construction service and are very likely charged on to you at 13.5%.
It pushes the remaining contract the wrong way - or the right one
Strip the materials out and what is left is closer to labour-only, which moves it further from the two-thirds threshold and keeps it comfortably at 13.5%. That is real, and it is the one thing the manoeuvre gets right. It is almost never enough to pay for the 9.5 points you just handed over at the merchant on the materials themselves.
Source: Revenue, "Who can reclaim VAT?", page published 8 December 2025 - "You may not reclaim VAT on goods or services used for making exempt supplies or for your non-business activities." Read the page. That building materials take the standard rate is stated in Revenue's VAT treatment of construction services, section 4.3 - both read 17 September 2026.
There are good non-tax reasons to buy your own materials - you want a particular specification, or you want control of what arrives on site. Saving VAT is not one of them. And if you do it, the responsibility for anything that turns up short, late or wrong moves to you along with the receipt.
The trade who charges no VAT at all
Two honest quotes can differ by more than anyone's margin, because one of them has no VAT in it.
VAT registration becomes obligatory when annual turnover exceeds the threshold, and for a person supplying services only that threshold is €42,500. Below it, registration is optional. A sole trader working under that level charges you no VAT, and is not doing anything irregular by doing so.
Source: Revenue, "VAT thresholds", page published 6 May 2026 - "€42,500, in the case of persons supplying services only". Read the page - read 17 September 2026.
What it means for comparing quotes
A non-registered trade's price is the price. A registered one's ex-VAT price is not. Line them up ex-VAT and the registered builder looks cheaper than they are; line them up on what you hand over and you are comparing correctly. It also tells you something about scale: a services-only turnover under €42,500 is a small operation, which may be exactly right for one trade on one element and wrong for a whole conversion.
Why a subcontractor's invoice looks different
If you ever see an invoice between two firms on your job, it may carry no VAT and a line saying VAT is to be accounted for by the principal contractor. That is the reverse charge: where a subcontractor supplies a principal contractor and Relevant Contracts Tax applies, the recipient rather than the supplier accounts for the VAT. Revenue also states that the two-thirds rule cannot apply to those supplies, nor to construction services between two connected parties.
Does that reach you? On Revenue's test, you are a principal contractor if you use a subcontractor to carry out activities on behalf of your business. A homeowner having their own house converted is not carrying on a business, and Revenue's construction manual takes the ordinary case head-on: a builder building an extension for a private individual "charges and accounts for VAT on the supply under the normal rules". So the reverse charge sits between the firms on your job, not between you and your builder, and the two-thirds rule applies to what you are charged.
Where we stop
That answer is for a homeowner converting the house they live in. We are not going to tell you where the edge is - a landlord, someone already carrying on a business, someone engaging six trades directly and coordinating them - because Revenue's guidance does not draw that line in terms we can quote, and inventing it would be exactly the kind of confident wrong answer this site exists to avoid. If you are not simply a homeowner, that is a question for your own accountant.
Source: Revenue, "Relevant Contracts Tax (RCT) for principal contractors", page published 19 May 2026; read the page. And Revenue, VAT treatment of construction services, sections 2, 5 and 6.1, document last reviewed August 2026 - both read 17 September 2026.
What relief is available to you now
None, for a conversion. We would rather say that in four words than let you keep searching.
The scheme people are still looking for is the Home Renovation Incentive, an income tax credit for repairs, renovations and improvements. It is closed. Revenue states that you cannot claim for any work carried out, or paid for, after 31 December 2018 - the only exception being where planning permission was already in place by that date, which extended qualifying work to 31 March 2019. A conversion starting now is years outside it.
Source: Revenue, "Home Renovation Incentive (HRI)", page published 21 May 2026. Read the page - read 17 September 2026.
The one route that does put money back against attic work is an SEAI grant on insulation, which is a grant rather than a tax relief, is paid against a defined retrofit measure rather than against your build, and comes with conditions that end it for most conversions. We go through those honestly in the SEAI grants guide. Budget your conversion as though there is no relief, because there is not.
The three questions to ask before you accept
You now have enough to check your own quote. Here is what that looks like as three sentences you can say on the phone.
1. "Is this figure including VAT, and at what rate?"
Get both halves in writing. On a €30,000 quote the difference between inclusive and exclusive is €4,050 at 13.5%, which is more than most of the optional extras you are agonising over.
2. "Are you VAT-registered?"
Not an accusation - a comparison question. If one quote has no VAT in it and another does, you need to know that before you put the two numbers side by side. Ask it of everyone you are comparing, so that it reads as process rather than suspicion.
3. "If any element is at 23%, which one, and why?"
A builder who knows their trade will answer this without difficulty: it is a fitting rather than a fixture, or the materials in that package exceed two-thirds. An answer that explains it in those terms is a good sign about the rest of the paperwork. No answer at all is a different kind of sign.
So: is the VAT on your quote right?
If it is a whole-conversion quote at 13.5%, almost certainly yes. If it is a whole-conversion quote at 23%, ask question 3 - it is unlikely to be correct on a job that heavy in labour, and the difference is thousands. If it is a materials-heavy package at 23%, that is very possibly right and you should not push back on it as though it were an error. And if the quote does not say, you do not yet have a quote.
Working out what your conversion will actually cost?
Our free planning tool covers insulation, ensuite decisions and everything else for your specific setup. It takes 2 minutes and you get a PDF you can take to your builder.
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