Sole Trader or Limited Company for a Self-Build in Ireland — The Tax and VAT Trade-Off
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Most Irish self-builders register as a sole trader with Revenue before they start spending on materials. The reason is VAT: registered sole traders can reclaim VAT on materials (23%) and a portion of VAT on labour (13.5%) under the Revenue VAT 13B scheme for residential property. Without registration, VAT is a real cost — typically €30k–€90k on a €500k build. The registration itself is free and takes about 10 working days. Limited company is overkill unless you're building more than one house in a 24-month period; the administrative burden (annual returns, Corporation Tax, payroll if you employ anyone) outweighs the benefit for a single self-build. Talk to your accountant before you register — the right structure depends on your tax band, your income, and whether you intend to claim the VAT refund.
TL;DR
Registering as a sole trader lets most self-builders reclaim VAT on materials and a portion on labour. Without registration, VAT is a real cost (€30k–€90k on a €500k build).
Limited company is overkill unless you're building more than one house. Most self-builders register as a sole trader with Revenue.
Talk to your accountant before you register. The right structure depends on your income, your tax band, and whether you plan to reclaim the VAT.
When this matters most
You're at the pre-construction phase and need to decide on a legal entity for the build.
When this doesn't apply
You've already registered, or you're using a main contractor who is the VAT-registered entity.
Frequently asked questions
Should I register as a sole trader for a self-build in Ireland?
Most self-builders do, to reclaim VAT on materials (23%) and a portion on labour (13.5%) under the Revenue VAT 13B scheme. Registration is free and takes about 10 working days.
Is it better to set up a limited company for a self-build?
Only if you're building more than one house. Limited company adds administrative burden (annual returns, Corporation Tax, payroll) that outweighs the benefit for a single self-build.
How much VAT can I reclaim on a self-build in Ireland?
Most materials at 23% and a portion of labour at 13.5% under the VAT 13B scheme. About 80% of self-builders cannot recover VAT in full; registered sole traders typically recover 40–60% of total VAT paid.
Sources
Revenue Commissioners, VAT on residential property. https://www.revenue.ie/
Citizens Information, Self-employed and VAT. https://www.citizensinformation.ie/
Frequently asked questions
Should I register as a sole trader for a self-build in Ireland?
Most self-builders do, to reclaim VAT on materials (23%) and a portion on labour (13.5%) under the Revenue VAT 13B scheme. Registration is free and takes about 10 working days.
Is it better to set up a limited company for a self-build?
Only if you're building more than one house. Limited company adds administrative burden (annual returns, Corporation Tax, payroll) that outweighs the benefit for a single self-build.
How much VAT can I reclaim on a self-build in Ireland?
Most materials at 23% and a portion of labour at 13.5% under the VAT 13B scheme. About 80% of self-builders cannot recover VAT in full; registered sole traders typically recover 40–60% of total VAT paid.