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Property challenges

24 October 2023 / Neil Warren
Issue: 4910 / Categories: Comment & Analysis , anti-avoidance , Property , Land & property , VAT
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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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