Vacant Building Credit explained: reducing affordable housing contributions

 

Vacant Building Credit, usually shortened to VBC, is a national planning policy mechanism which can reduce the affordable housing contribution required when a vacant building is brought back into lawful use or demolished and replaced. The credit is based on the existing gross floorspace of qualifying vacant buildings.

It can materially change the affordable housing requirement on a brownfield redevelopment, but it is frequently confused with the separate rules for existing floorspace under the Community Infrastructure Levy. The two tests are not the same.

This guide explains when Vacant Building Credit applies, how the calculation works, what happens where a building has been abandoned or deliberately made vacant, what evidence an applicant should provide, and the significance of West Berkshire [2016] EWCA Civ 441.

 

What is Vacant Building Credit?

 

The Government describes Vacant Building Credit as an incentive for brownfield development on sites containing vacant buildings. Where a qualifying vacant building is brought back into lawful use, or demolished and replaced, its existing gross floorspace is credited when the local planning authority calculates the affordable housing contribution.

The policy does not create a cash payment to the developer. It reduces the amount of affordable housing, or the equivalent financial contribution, which would otherwise be sought.

VBC sits within the wider world of planning gain, Section 106 obligations and affordable housing planning. It is not a separate planning permission or application type.

 

How the Vacant Building Credit calculation works

 

The starting point is the gross floorspace of the qualifying vacant building and the gross floorspace of the proposed development.

Government guidance gives a simple example. If an existing vacant building contains 8,000 square metres and the proposed development contains 10,000 square metres, the affordable housing contribution is calculated on the 2,000 square metre increase. The contribution is therefore one fifth of what would normally be sought.

Expressed another way, the qualifying existing floorspace is credited against the new development before the affordable housing requirement is applied.

Where the proposed gross floorspace does not exceed the qualifying vacant floorspace, the credit can in principle remove the affordable housing contribution generated by that floorspace. The precise application still needs to be considered against current national policy, guidance and the facts of the case.

 

Vacant Building Credit only affects affordable housing

 

This is one of the most important limits.

Vacant Building Credit is a credit against the affordable housing contribution. It does not automatically remove other planning obligations. A development may still require site-specific mitigation, infrastructure contributions or other obligations which satisfy the statutory tests in regulation 122 of the Community Infrastructure Levy Regulations 2010.

It also does not exempt the development from CIL. CIL liability and any deduction for existing floorspace are calculated under the separate statutory CIL regime.

 

The building must be vacant, but not abandoned

 

Government guidance says Vacant Building Credit applies where the building has not been abandoned.

Vacancy and abandonment are not the same thing. A building can be empty for a considerable period without its lawful use necessarily having been abandoned. Whether abandonment has occurred is a planning judgment based on all the circumstances.

The guidance identifies matters including:

• the physical condition of the property
• the period of non-use
• whether an intervening use has occurred
• evidence of the owner’s intentions

No single factor automatically decides the issue. The evidence needs to be considered together.

 

How long must a building be vacant for Vacant Building Credit?

 

There is no national minimum vacancy period for Vacant Building Credit. The national policy and Planning Practice Guidance do not say that a building must have been empty for six months, one year, two years or any other fixed period before the planning application is submitted.

The length of non-use is still relevant, but for a different reason. Government guidance identifies the period of non-use as one of the circumstances to consider when deciding whether a building has become abandoned. A very short vacancy may also prompt questions about whether the building was made vacant solely to obtain the credit.

Some local planning authorities publish their own VBC guidance and may ask for evidence covering a particular period, marketing history or other local criteria. Those requirements should not be confused with the national test. Check the authority’s current guidance at the time of the application and, where a rigid local time limit is relied upon, ask how it relates to the national policy and guidance.

This also explains why two apparently similar sites can be treated differently. One authority may be satisfied by clear evidence that a genuinely redundant building became vacant relatively recently, while another may seek a longer evidential history before accepting that the vacancy is genuine.

 

What if the building was deliberately made vacant?

 

VBC is intended to encourage the reuse and redevelopment of genuinely empty and redundant buildings. The guidance therefore allows an authority to consider whether a building was made vacant solely for the purpose of redevelopment.

An authority may also consider whether the building is covered by an extant or recently expired planning permission for the same or substantially the same development.

This does not create a simple rule that any recent vacancy defeats VBC. It means the circumstances and purpose of the vacancy can be relevant to whether applying the national policy would serve its intended brownfield purpose.

 

What evidence should support a Vacant Building Credit claim?

 

A good VBC submission should make the calculation and the factual basis easy to audit. Depending on the site, useful evidence can include:

• measured plans showing the existing gross floorspace
• plans and schedules showing the proposed gross floorspace
• evidence of the building’s lawful use
• dates and evidence showing when the building became vacant
• business rates, tenancy, utility or occupation records where relevant
• dated photographs showing the condition of the building
• planning history, including any extant or recently expired permission
• an explanation of why the building is vacant rather than abandoned
• a clear worked calculation of the affordable housing credit claimed

Where the issue may be contentious, it is better to establish the evidence with the planning application rather than introduce VBC late in the Section 106 negotiations.

 

Vacant Building Credit and CIL existing floorspace are different

 

Both mechanisms refer to existing floorspace, which is why they are often confused.

Vacant Building Credit is a national planning policy mechanism affecting affordable housing contributions.

CIL existing floorspace is part of the statutory levy calculation and has its own requirements, including rules concerning lawful use during the relevant period.

A building may therefore qualify under one mechanism but not the other. Never assume that a successful VBC claim produces the same floorspace deduction for CIL. Our CIL guide deals with that separate calculation.

 

West Berkshire and the status of national policy

 

The national policy which introduced Vacant Building Credit and the small-sites affordable housing threshold was challenged by West Berkshire District Council and Reading Borough Council.

In Secretary of State for Communities and Local Government v West Berkshire District Council and Reading Borough Council [2016] EWCA Civ 441, the Court of Appeal allowed the Secretary of State’s appeal and overturned the High Court decision which had held the policy unlawful.

The judgment is important because it explains how national planning policy fits into the statutory plan-led system. A national policy may be expressed in strong terms, but its legal role in an individual planning decision remains that of a material consideration. It does not displace section 38(6) of the Planning and Compulsory Purchase Act 2004.

That distinction remains current. In Gladman Developments Ltd v Secretary of State for Housing, Communities and Local Government [2026] EWHC 51 (Admin), the High Court expressly returned to paragraph 30 of West Berkshire when explaining how strongly worded national policy is lawfully applied.

 

Does a local plan override Vacant Building Credit?

 

The answer is not as simple as saying either national policy or the local plan automatically wins.

Section 38(6) requires a planning decision to be made in accordance with the development plan unless material considerations indicate otherwise. National policy and Planning Practice Guidance are capable of being important material considerations. West Berkshire confirms that national policy does not rewrite the statute, but neither can it simply be ignored because a local policy takes a different approach.

For a live application, the decision-maker needs to identify the relevant development-plan policy, the current national VBC policy and guidance, and then apply planning judgment lawfully to the particular facts.

 

Can Vacant Building Credit be used with a viability argument?

 

They are different mechanisms.

VBC applies because national policy credits qualifying vacant floorspace. A viability assessment asks whether policy requirements can be supported by the economics of the particular development.

A development may raise both issues, but the VBC calculation should not be blurred into a viability negotiation. Establish the policy credit first, then identify what affordable housing requirement remains before considering whether a separate viability case is justified.

 

Practical Vacant Building Credit checklist

 

• Confirm that the existing building is genuinely vacant
• Check whether there is any real issue of abandonment
• Establish the lawful use and planning history
• Measure the qualifying existing gross floorspace accurately
• Measure the proposed gross floorspace on the same basis
• Calculate the credit transparently
• Explain the vacancy history and the owner’s intentions where relevant
• Check for an extant or recently expired permission
• Keep the VBC calculation separate from the CIL floorspace calculation
• Raise the claim with the planning application rather than at the end of Section 106 negotiations

 

Where Vacant Building Credit fits into planning gain

 

VBC is only one part of the wider developer-contributions picture. Our Planning Gain guide explains Section 106, CIL, affordable housing, monitoring fees, commuted sums and the legal tests that limit what an authority can seek.

For the detailed legal mechanisms, see our guides to Section 106 agreements and the Planning Agreements and Obligations section.

 

Vacant Building Credit policy and case law

 

• Planning Practice Guidance: planning obligations, paragraphs 025 to 027 on Vacant Building Credit
• National Planning Policy Framework, August 2026
• Secretary of State for Communities and Local Government v West Berkshire District Council and Reading Borough Council [2016] EWCA Civ 441
• Gladman Developments Ltd v Secretary of State for Housing, Communities and Local Government [2026] EWHC 51 (Admin)
• Planning and Compulsory Purchase Act 2004, section 38

Developer contributions & planning agreements

 

Vacant Building Credit Page Updated: 30th August 2026