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Property challenges
Key points
- Each project where a commercial property has been converted into dwellings will have different VAT issues.
- The best outcome is when a final property sale is zero rated which gives the ‘win win’ scenario of being able to claim input tax on expenses with no output tax liability.
- A developer only needs to issue a certificate to its chosen building contractor(s) to confirm that a project qualifies as a residential conversion (where a 5% rate of VAT will apply to builder services) if a project is a building to be used for a ‘relevant residential purpose’.
VAT queries can sometimes be like the number 37 bus in Manchester: you get none on a particular subject for ages and then three turn up together. In recent months I have dealt with the VAT issues of three different projects where a commercial property has been converted into dwellings...
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