Residential Property VAT Guide When you sell or rent an existing residential property such as a house or flat then you will normally be making a VAT exempt supply. This means you don’t charge VAT but cannot recover the VAT you incur on your purchases relating to it.
Does VAT apply to land purchases?
In most cases the sale of land to a housebuilder is exempt from VAT unless the vendor has opted to tax it. The main effect of opting to tax is that the landowner charges VAT on the sale and recovers VAT on the costs, providing there is an appropriate VAT registration in place.
Does sale of property go on VAT return?
Taxable supplies: Any supply of goods or services is ‘taxable’, unless the VAT legislation specifies that it is exempt. These thresholds are always liable to catch large one-off transactions, such as property transactions, unless the sale or supply is exempt and not ‘taxable’.
What is the VAT on selling a house?
The average estate agent fee is 1.42% of the final selling price (inc VAT), according to a July 2018 survey by the Advisory for sole agency. You should aim to get a fee that is 1% + VAT for a sole agency contract (on the agreed sale price).
Do you pay VAT on letting fees?
If the landlord has ‘opted to tax’ for VAT purposes, then the rental payments will be subject to VAT; otherwise, rental payments are exempt from VAT. If your business is VAT-registered, your costs will not normally be any higher whether the landlord has opted to tax or not.
Do you pay VAT when selling second hand goods?
Rather than the full selling price, the VAT margin scheme taxes the difference between what you originally paid for an item and what the resale price was. This also means if you sell a second-hand item for less than your original purchase price, you will not have any VAT to account for.
Do you pay VAT twice?
The purpose of this exemption is to facilitate and speed up customs clearance on entry into Great Britain. In return, the seller has to issue the invoice including VAT and he is liable for VAT on the supply of goods. If the invoice includes VAT, the customer will pay the VAT twice.
Do you pay VAT on option fee?
It has long been the position that the grant of an option to acquire land (a call option) is itself the grant of an interest in land, and therefore usually exempt from VAT unless the grantor has opted to tax the land. The same treatment applies to put options and surrenders of options.
Can I reclaim VAT on building work?
Can you claim a refund from HMRC? The short answer is that it’s between you and your contractor/supplier. If the work is done in the course of a “qualifying renovation” and the services are “relevant services”, the supplier can charge VAT at 5% on services and goods supplied in connection with the services.
