Buying commercial property & VAT

[Roger645]

Might seem a silly question but is VAT payable on commercial property. Property in question is a house with 3 holiday cottages in the grounds. House would become primary residence with holiday cottages let out during season.

Thanks

Roger

[pacoryan]

It depends, but in this circumstance I believe not, certainly not on the residential part (as long as you agree apportionment with the local tax office), and I think the cottages will be exempt. It may depend on when the work was done as the supply of new commercial property is VAT-able and "new" means within 3 years, but I'm not 100% on conversions.

Any accountants out there?!?!!

[2 5HAN]

Talk to the Vendors first as landlords or individuals can "opt to tax" a property or properties if they have sought to recover VAT at any point of ownership

This will mean that VAT is therefore chargeable on the sale, a real pain in the a$$ if you are a private purchaser.

[Roger645]

Thanks for the replies all! I speak to the vendor.

[Eric Mc]

Many commercial properties will have the VAT Option exercised as the buying and selling of such properties will be between VAT registered entities. With an Option to VAT exercised, the property owner can reclaim VAT on property maintenance etc.