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VAT and Property Transactions

VAT and Property Transactions

The VAT treatment of property, construction, and land transactions can be very complicated and any mistakes made are often not easy to correct afterwards. If you are planning on doing anything that is unusual it would pay to talk to the VAT advisers at Moore Stephens in Peterborough.

Generally property transactions are VAT exempt although there are exceptions to this rule.

If you sell or rent existing residential property you will be making an exempt supply for VAT purposes. The VAT you incur on goods and services relating to the property is unlikely to be recoverable (see our partially exempt page). This means that if your business consists entirely of renting residential accommodation you will not need to register for VAT. 

If you sell or rent “old” commercial property the default liability is exempt. However there are circumstances when VAT will be charged. The most common is where the VAT option to tax is invoked.  This is where the owner/landlord has chosen to charge VAT. This is done by waiving the VAT exemption, more commonly known as “opting to tax” and allows the owner/landlord to recover input VAT on their costs.

Anyone regularly involved in property transactions will know there are many ways in which these fairly basic rules become extremely complex. Given the sums involved, it pays to ensure the VAT position of anything other than the most basic property transaction is reviewed by an expert at an early stage.

If you need advice about VAT and any property transactions that you are thinking of making please contact us for expert advice. 


A specialist Moore Stephens VAT website – click here to go to the main Moore Stephens UK website