Police have confirmed a firearm was discharged during the incident at Brittania Gardens, Pudsey, after masked men were seen entering the property.
No one was inside the property at the time and no one was injured.
Armed officers arrived at the scene after a call to West Yorkshire Police at 12.14am.
The property is next door to the White horse pub, on Hough Side Road.
Landlord Brian Town told the Yorkshire Evening Post how he heard around ten loud gunshots shortly after closing the pub.
He said: "I thought it was fireworks at first.
"But after the first three, I realised it was something more serious
"I went out to see what was going on and could see the back window and door had been shot through round the back.
"There were also bullet holes in the brickwork.
"Armed police got here in no time at all. They were all over the place and reacted very quickly."
The landlord said police had been in touch with him to check CCTV footage from camaras at the pub but were unable to find any evidence of the incident.
Mr Town said he did not know who lives at the address.
The house, part of a terrace of newly-built properties, was corndoned off this afternoon as police and forensic officers continued to investigate.
Officers carried out a fingertip search of a grassed area at the side of the property.
Mr Town added: "Nothing like this has happened around here before. It's come as a bit of a shock.
"It's a good neighourhood. We get a lot of regulars in the pub and most people seem to know each other."
Police have tracked down the people who live at the property and have confirmed that they are safe and well.
Detective Inspector Emma Winfield, of West Yorkshire Police's Homicide and Major Enquiry Team, said: “This appears to have been a targeted attack and we are working with the tenants at the address to ensure that appropriate safeguarding is put in place.
“We take any firearms discharge extremely seriously, and while thankfully it appears that no-one has been hurt in this incident, we are committed to taking all firearms off our streets and ensuring that the people who use them are put behind bars.
“Officers have spoken to a number of residents of Britannia Gardens but are keen to hear from anyone else who witnessed any suspicious behaviour in the area or who has information about those involved.”