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Vat on letting of property

  • 23-01-2017 2:17pm
    #1
    MaryG17
    Registered Users, Registered Users 2 Posts: 1 ✭


    I have a query with regard to my requirement to charge Vat on a residential letting. I have 2 rental properties. The first I purchased back in 2006 and claimed a waiver of exemption so that I could claim back the vat on the purchase price. I have been charging vat on the rent ever since. I am satisfied that this is the correct tax treatment.

    I have a 2nd property which was my principal primary residence from 2003 until May 2013. I started to rent it out in June 2013. I did not claim any input deduction on the purchase of this property. Under the old Vat rules pre 2008 I would have had to charge vat on the rent of this property as I had a waiver of exemption on another property. However under the new VAT rules with effect from July 2008, all new lettings of residential properties are exempt from VAT and a waiver of exemption cannot be claimed nor can an option to tax be exercised.

    However my concern is as follows: because I owned the 2nd property at July 2008 (but did not let it until May 2013) am I obliged to extend the waiver of exemption to it. Should I have been charging VAT on the 2nd property? The transitional rules state that if you acquired a property pre'2008 and all development was substantially complete, then it does not prevent you from extending an existing waiver of exemption to that property. It does not say that you must extend the waiver of exemption - it only says that it does not prevent it.

    Can anyone advise if I am required to charge VAT on the 2nd property?


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