VAT on Property

Most property transactions are eligible for VAT exemption

Which brings with it a potential restriction to the level of VAT that can be recovered on related costs (and also other overhead costs).

This is reason enough to approach property transactions with great care. But add to this the fact that there are a number of other possible VAT treatments that can apply to property transactions, including the Option to Tax, which is the option to apply VAT to certain transactions that would otherwise be VAT exempt, VAT on property considerations become an essential part of all property-related projects/transactions.

Payments made in relation to the lease or sale of land and property may be subject to VAT exemption, the VAT zero-rate, the VAT standard-rate (20%) or may even be outside the scope of VAT.

Construction services are typically subject to VAT on property at the standard-rate but work in relation to residential properties may also be eligible for the VAT zero-rate or the VAT reduced-rate (5%).

The rules dictating the application of these VAT reliefs can be complex and are often under-utilised by developers.  This is often because contractors are unfamiliar with how VAT reliefs apply.

We have assisted many property developers, including high profile developers, to maximise VAT reliefs and minimise irrecoverable VAT on property costs.

Where VAT on property reliefs and other VAT efficient structures are available, they will only typically apply if certain conditions are met. With our wide knowledge of how VAT applies to property transactions, Xperta Tax are perfectly placed to help you ensure that these conditions are identified and adhered to.

If you’d like further help or information about VAT & Property or other VAT matters feel free to get in touch using the form below.