VAT on new build

VAT on new build

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Hello.
A builder has bought a piece of land, and is building 2 new homes on it for resale. (They will not be his home).
Can he claim VAT back on the costs (materials, labour etc..), without going VAT registered?
Or do the suppliers 'zero rate' and not charge VAT?
Thanks lots

Paul

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By neileg
25th Apr 2007 16:51

No choice?
It's hard to imaging that the selling price of a new house will be below £60k, so he's going over the VAT threshhold, anyway.

There's a self build scheme that applies to people building their own houses, but that's not applicable to your case.

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Euan's picture
By Euan MacLennan
25th Apr 2007 17:11

No and No
No - you cannot reclaim VAT charged to you without being registered for VAT.

No - suppliers of materials will charge VAT; only sub-contractors doing construction work on new dwellings will not charge VAT (or to be precise, will charge it at the zero rate).

It will be very much in the interest of your builder to register for VAT, but having done so, he will have to charge VAT on all his jobbing work to other customers. The sale of the new houses will be zero-rated.

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