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VAT on purchase of Commercial Premises

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  • 26-10-2010 1:51pm
    #1
    delta1970
    Registered Users Posts: 6 ✭


    Hi all, I have posted this question on the accountancy thread and then found the taxation thread which is probably a more suitable area. My question is a charity Organisation I am a member of is currently considering purchasing a Industrial type building. It was built approx 7 - 8 yrs ago. It was leased for some time and that lease is finished and the owner is selling the building on. Its really good value at the moment. As it is built over 5 years ago - regarding the new "Vat rules" on purchasing a commercial premises (July 2008) is this building classified as an old building therefore no VAT is applicable. As we are a Charity we are not VAT exempt and having to pay VAT @ 13.5% on this premises would be an added extra cost. Any advise would me most appreciated. Dave
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    #2
    Alan Shore
    Registered Users Posts: 735 ✭✭✭Alan Shore


    delta1970 wrote: »
    As we are a Charity we are not VAT exempt and having to pay VAT @ 13.5% on this premises would be an added extra cost.

    I presume you mean you are VAT exempt and will suffer VAT if charged on the purchase.
    The charter says that property related queries will be closed but if the landlord recovered VAT on the property originally they will seek to tax the sale otherwise they will have to repay a portion on the VAT recovered.
    A cost to them.
    C


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    #3
    delta1970
    Registered Users Posts: 6 ✭delta1970


    Hi - Thanks for your answer.. No we are not Vat exempt.. Charities in Ireland must pay VAT like the normal person on the street - Using the wording Vat exempt I see now if probably confusing. I should have said Not VAT registered and therefore we can not claim back the VAT. And yes we would suffer as it would be another added cost to purchase the property. The auctioneer has said that VAT is to be paid on the property but we are going to talk to the owner to see if he will sell without Vat and depending on the VAT he may owe back to the revenue it may be a cheaper option to us. Thanks for your advice - it has answered my question and I'm getting a better understanding of this.


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