residential and commercial development

VAT consideration

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Hi all

im wondering about the VAT on developing residential and commercial properties that have been empty for 7 years. I'll be doing most of the work myself and will only pay a painter to come in

can anyone advise on if i can become VAT registered for this and reclaim the VAT on my purchases? is it restricted to the commercial building or can i reclaim for both as they have been empty more than 2 years?

i will get an accountant eventually but its just for some advice in the meantime so i can get my head around what will be needed and whats to be considered

Thanks in advance

Replies (5)

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By Les Howard
08th Oct 2016 19:52

It depends! Will you occupy any part, or sell, or let? Depending on the answers you might Opt to Tax, and register for VAT, but don't do that without careful thought.

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By propertyguy
09th Oct 2016 10:08

Hi, I won't be occupying any of it. Updating 4 flats and a commercial property to then sell on

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By shaun king
09th Oct 2016 11:32

If you become VAT registered and opt to tax the commercial property you will ber able to recover the VAT incurred on costs directly attributable to that project. The VAT on the residential will be irrecoverable (small proviso ask your accountant about De Minimis rules for Partial Exemption).

Best answer take advice, as you will need the costings to consider the best VAT solution.

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Replying to shaun king:
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By propertyguy
09th Oct 2016 12:20

Thanks but is that taking into account the property being empty for more than two years?

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By shaun king
09th Oct 2016 16:37

The two year rule is for the reduced rate of repairs etc being undertaken by a VAT registered supplier. In your case you are doing it yourself so it doesnt apply.

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