VAT On Properties

Question 1

Exempt supplies (property)

Answer 1

Residential (except new build)
Commercial over 3 yrs old where owner not opted to tax

Question 2

Zero-rated supplies (property)

Answer 2

Newly constructed residential

Question 3

Standard rated (property)

Answer 3

Newly constructed commercial (less than 3yrs)
Older commercial if seller opted to tax

Question 4

Why opt to tax?

Answer 4

So you can recover input tax

Question 5

Where to find if seller has opted to tax?

Answer 5

CPSE1

Question 6

When will opting to tax be of particular concern to a buyer?

Answer 6

If they are not able to recover input tax, ie banks or building societies because they are exempt supplies

Question 7

What is default position in SCPC as regards VAT?

Answer 7

Property is standard rated
Price is inclusive of VAT

Question 8

How to change position in property contract if property is not standard rated?

Answer 8

Special condition 9 A1 if property is not subject to VAT and seller has not opted to tax

Special condition 9A2 if seller states using property to produce rental income, ie transfer of going concern (which is not taxable supply for VAT)