Vat on commercial property

111bluesky

need help.
Question 1

I bought the shop ( commercial property) recently, the lease is over holding at moment.
the rent is 9000 plus vat. as i don't have any business. doesn't register Vat.
do i just get rent without vat, or need to register vat to get rent with vat.

Question 2

as the rent is quit low at market. the tenant did't agree the rent increase.
but lease is more than 6 years already. how can i let them leave?

Thanks you

gerrybbadd

111bluesky wrote: »

need help.
Question 1

I bought the shop ( commercial property) recently, the lease is over holding at moment.
the rent is 9000 plus vat. as i don't have any business. doesn't register Vat.
do i just get rent without vat, or need to register vat to get rent with vat.

Question 2

as the rent is quit low at market. the tenant did't agree the rent increase.
but lease is more than 6 years already. how can i let them leave?

Thanks you

Question 1

If you are not registered for VAT, you cannot charge VAT.

Question 2 isn't a tax query

111bluesky

111bluesky wrote: »

need help.
Question 1

I bought the shop ( commercial property) recently, the lease is over holding at moment.
the rent is 9000 plus vat. as i don't have any business. doesn't register Vat.
do i just get rent without vat, or need to register vat to get rent with vat.

Question 2

as the rent is quit low at market. the tenant did't agree the rent increase.
but lease is more than 6 years already. how can i let them leave?

Thanks you

VAT on property rules are very complicated and depend on the provenance of the property. You need to take into account not only the VAT obligations from when you bought the property but also the implications of what the previous owner did with the property.

111bluesky

brenbrady wrote: »

VAT on property rules are very complicated and depend on the provenance of the property. You need to take into account not only the VAT obligations from when you bought the property but also the implications of what the previous owner did with the property.

Thanks for reply, previous owner was paying Vat on the rent. I asked my accountant, he said I can decide pay or not pay the Vat on rent. I am confused now. should I ask revenue or someone else?

111bluesky

111bluesky wrote: »

Thanks for reply, previous owner was paying Vat on the rent. I asked my accountant, he said I can decide pay or not pay the Vat on rent. I am confused now. should I ask revenue or someone else?

It depends, did you reclaim VAT on the purchase price?

Normally the vendors solicitor completes a Pre Contract VAT Enquiries form and a VAT opinion is obtained from an accountant/tax advisor. The cost is in region of €700 plus VAT depending on the transaction.

Hope this helps.

111bluesky

Thanks, bought from auction, no vat on sale. So I can't claim the vat? The vendor solicitor didn't complete vat enquiries form.

Problem is that if you start charging VAT on the rent, when you go to sell the property you'll have to include VAT on the sales price. That's just a high level example so don't take it as professional advice. If I was you I'd ask your accountant to give you a formal opinion.

Lockedout2

brenbrady wrote: »

Problem is that if you start charging VAT on the rent, when you go to sell the property you'll have to include VAT on the sales price. That's just a high level example so don't take it as professional advice. If I was you I'd ask your accountant to give you a formal opinion.

That’s not the problem at all.

The problem is the OP has no idea how much VAT the could potentially owe if they don’t charge VAT on the lease.

The sale could have been subject to TOB rules and if the OP has not received the details then does not know where they are at?