Why should I consider selling affordable housing at “Golden Brick”?

Sep 24, 2020

When developing a larger residential site, it is common for the development to include dwellings to be allocated as affordable housing. The time of the acquisition by the Registered Provider can occur at a number of different times. This article focuses on sales at the “Golden Brick” stage.

What is “Golden Brick”?
It’s not a very expensive building material! Instead, Golden Brick refers to the point at which construction of the dwelling reaches above foundation level, so the first brick on the top of the foundations is the “Golden Brick”.

Why should I consider completing the sale of affordable housing units at Golden Brick stage?
The point of sale can be important in relation to the VAT treatment of the land where a property is opted to tax for VAT. Where the Golden Brick stage has been achieved, the residential building will qualify for zero-rating for VAT purposes, as under current HMRC rules the sale of a new dwelling is zero-rated. In order for this VAT treatment to apply, the tax legislation requires that the building is clearly under construction, therefore, so long as the construction has passed the foundations it will benefit from the zero-rating. This is why the Golden Brick is so important.

This benefits developers, as VAT incurred on the acquisition of the land (or other services) can be recovered. It also has potential benefits for the affordable housing provider buying the units because the buyer will pay the land value on Golden Brick, and separately pay for the remaining building works (usually in tranches at specified points in the build schedule). Therefore Stamp Duty Land Tax is only paid on the land value.

What happens after “Golden Brick”?
Where affordable housing units are being sold on Golden Brick, it is usual for the transactional documents to include a build agreement to require the developer to complete construction, so that the affordable housing provider is not left with a layer of bricks above the property’s foundation. The build agreement will either be included within the sale agreement, or it will be a separate document, and in either case, it will allow the developer access to the affordable housing units in order to finalise construction. Provisions will also need to be made for handover of the dwellings once they have achieved practical completion.

If you require further advice regarding affordable housing agreements or any other Real Estate matter, please contact Steph Richards in our Real Estate department. You can also email your query to realestate@herrington-carmichael.com, call 01276 686222 or visit https://www.herrington-carmichael.com/

This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter

Contact us

    Sign up below to receive our monthly legal Insight.

    We all need to abide by the law and our Insights will help keep you, your family and/or business safe and up to date on how the law affects you.

    Our Insights also include podcast discussions and information about our events and services.

    We will only ever send you information that relates to your preferences and you can opt out at any time.

    Latest Articles & Legal Insights

    Plot Sales FAQs

    Plot Sales FAQs

    Where NHBC (or alternative warranty provider) deal with the warranty and the Building Regulations on a development…

    read more

    Top Legal Insights


    Contract Law

    Material Breach of Contract

    What is a ‘material’ breach of contract by a party to a commercial contract? This is a critical issue regularly considered by the courts. What constitutes a material breach and what are the remedies?

    Property Law

    Commercial Lease: The Financial impact on Landlord and Tenant

    Coronavirus (COVID-19) and the restrictions now in place to control its spread, are having a significant effect on many business sectors.

    Divorce and Family Law

    Divorce in Lockdown: Can I get some discreet legal advice?

    We have spoken to clients who are unfortunately experiencing some family issues, and would like to obtain expert legal advice, yet don’t know how...

    Land & Property Dispute

    Restrictive Covenants – The Price of Modification

    Having identified that your land is burdened by a restrictive covenant and for the purposes of this article the covenant in question will be that only one residential building can be erected on the land. What do you do next?

    Wills, Trusts and Probate

    Why is having a will so important?

    It is entirely up to you if and when you want to create a Will, but it is important to be aware of the consequences of not having a Will.

    Award winning legal advice

    We are solicitors in Camberley, Wokingham and London. In 2019, Herrington Carmichael won ‘Property Law Firm of the Year’ at the Thames Valley Business Magazines Property Awards, ‘Best Medium Sized Business’ at the Surrey Heath Business Awards and we were named IR Global’s ‘Member of the Year’. We are ranked as a Leading Firm 2020 by Legal 500 and Alistair McArthur is ranked in Chambers 2020.



    60 St Martins Lane, Covent Garden, London, WC2N 4JS 

    +44 (0) 203 755 0557



    Building 2  Watchmoor Park, Riverside Way, Camberley, Surrey. GU15 3YL

    +44 (0)1276 686 222



    Opening Soon

    +44 (0)118 977 4045


    © 2020 Herrington Carmichael LLP. Registered in England and Wales company number OC322293.

    Herrington Carmichael LLP is authorised and regulated by the Solicitors Regulation Authority.

    Privacy   |   Terms and Conditions   |   Cookies   |   Client Feedback