Land and Property Development

Our qualified team of experts can offer a wide range of services aimed at helping businesses to decipher VAT in land and property transactions. We have helped hundreds of organisations in this area, meaning we are best placed to offer impartial advice.
As with any property development, VAT is a complex issue that should be dealt with correctly and efficiently. Failure to comply with regulations could mean your business is subject to fines from HMRC, while a lack of awareness regarding specific reliefs could mean you are paying more than you need to.
Contact The VAT People today by calling 0800 077 4604, or fill out an online contact form and we will get back to you at a more convenient time.  


Goods and services

The implications of a land or property transaction can vary depending on whether it involves a supply of goods or a supply of services. The distinction between these is significant because it determines the time that VAT becomes due. It is important for any transaction to be defined in this way from the start.

The grant, assignment or surrender of major interest in land or property is a supply of goods, whereas any other land or property-related supply is likely to be regarded a supply of services. The basic tax point is the time that they are first made available. This can be different from the state of invoice or payment.

Usually, the basic tax point for services is when the service is completed. However, there are special rules for any continuous supplies (such as rent) and specific provisions for construction services supplied under contract providing for staged payments. There are also anti-avoidance measures relating to stage payments, which can have significant implications for contractions with long retention periods.

Due to the complicated nature of land and property transactions, it is vital that all issues are addressed at an early stage, while being accurately reflected in the legal documentation.

Liability of supplies

Land or property transactions can be subject to VAT at different rates. Items can be exempt from VAT, attract VAT at a number of rates or be outside the scope of it altogether. While some of these items may be similar, they have subtle differences, especially when it comes to the recovery of VAT on related expenditure. 

Although no VAT is due when a land or property transaction is exempt from VAT, the individual making the supply will be unable to recover the related input tax. In contrast, a transaction that is zero-rated for VAT purposes will not be subject to output tax either, although an input tax recovery may be possible.

Relevant residential purpose

This term is used a lot in land or property transactions, and encompasses a number of potential uses. Usually, it means institutional buildings, which provide residential accommodation for their residents, for example, a care home. It does not include any building used as a hospital or a hotel.

It is generally for the recipient of the grant to certify their status to the supplier, which will therefore award relief for VAT. The timing of when this notification is issued is vital, as is the continued use of the property for the specified purpose.

How we can help

The VAT People can help to ensure your business is paying the right amount of VAT on land or property transactions. Our extensive knowledge means we can also advise on where you may be paying too much VAT, as well as discussing any reliefs available to you.

Contact us by calling 0800 077 4604, or fill out an online contact form and we will be in touch.

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