Property & Construction
VAT on land and buildings: the option to tax, renovations and conversions, and selling or letting property.
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Property & Construction
VAT on land and buildings: the option to tax, renovations and conversions, and selling or letting property.
What VAT can I reclaim on my property development?
It turns on what you do with the finished property: sell new homes and the VAT comes back, let them and it is blocked. Commercial turns on the option to tax.
When should I opt to tax a property?
Opting to tax turns an exempt property supply into a taxable one so you can recover VAT. Here is when it makes sense and what it commits you to.
Can I claim VAT back on renovating / refurbishing residential property?
If you renovate to let, no: residential lettings are exempt. But empty-home and non-residential conversions can unlock the 5% rate or full VAT recovery.
Should I opt to tax the property I have purchased?
Not always: if you use the property for a taxable trade you can reclaim VAT without opting. Opting matters when you rent or resell, and locks in for 20 years.
Do I charge VAT when I sell a commercial property?
Exempt by default, but a building completed in the last three years is standard-rated, an option to tax makes it 20%, and a going concern is outside VAT.