I’m selling a property, should I charge VAT?

The VAT rules in relation to land and property are particularly complex and depend on the VAT status and history of the property as well as whether it is residential or commercial.

Sales of residential properties are generally exempt from VAT, unless these are new builds or conversions from non-residential properties. For commercial properties the default position is also that these are exempt, but there are a number of exceptions to this, eg where the “option to tax” has been exercised. The option to tax means that any supplies of a property become subject to the standard rate of VAT so it is vitally important to establish if this option has been exercised in the past prior to any sale. Even if it hasn’t depending on the circumstances there may be a VAT advantage in opting to tax before the sale and each case should be considered on its own merits.

In view of the amounts involved in property transactions we would always strongly recommend that specialist advice is sought before contracts are signed.

Tax FAQs

Property Tax FAQs