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VAT implications of a newly-built holiday home with restricted occupation
I am confused about the VAT rules that will apply to a client who is building a new house on some land in Bournemouth.
However there is a planning restriction which states that he can live in it for only 11 months of the year the excluded month being February.
The client intends to rent out the property as holiday accommodation when it is completed and will also use it himself for holidays. Does this mean that the builders will have to charge 20% VAT because of the restriction rather than zero-rating their services as would normally be the case for a new house?
Despite this presumably he can register for VAT to claim input tax and claim on professional fees and materials he buys himself. But will there be an input tax restriction because of his own intended use of the property for some of the...
