VAT on apt purchaseowned by receiver?

theronca

[font=Arial, sans-serif]Hello[/font]
[font=Arial, sans-serif]First time buying in Ireland and we have gone sale agreed on an apartment which is being sold by a receiver as the developer was bankrupt. It is a \\\"new\\\" building -- less than 5 years old. Waiting for contract at the moment.[/font]

[font=Arial, sans-serif]It is taking forever (we offered on Feb 15th) and I have been reading about pitfalls in buying receiver-owned property. The main one I am concerned about is whether the reciever will expect us to pay VAT in addition to the sale agreed price? It was never mentioned by the estate agent. I have read where this sometimes happens in receiver-owned property. Would the agent/selling materials have mentioned it, were they to expect us to pay it?[/font]

[font=Arial, sans-serif]I should mention the apartment is no bargain and is being listed at or close to market price by a reputable agent.[/font]

[font=Arial, sans-serif]TIA[/font]

Marcusm

theronca wrote: »

[font=Arial, sans-serif]Hello[/font]
[font=Arial, sans-serif]First time buying in Ireland and we have gone sale agreed on an apartment which is being sold by a receiver as the developer was bankrupt. It is a \\\"new\\\" building -- less than 5 years old. Waiting for contract at the moment.[/font]

[font=Arial, sans-serif]It is taking forever (we offered on Feb 15th) and I have been reading about pitfalls in buying receiver-owned property. The main one I am concerned about is whether the reciever will expect us to pay VAT in addition to the sale agreed price? It was never mentioned by the estate agent. I have read where this sometimes happens in receiver-owned property. Would the agent/selling materials have mentioned it, were they to expect us to pay it?[/font]

[font=Arial, sans-serif]I should mention the apartment is no bargain and is being listed at or close to market price by a reputable agent.[/font]

[font=Arial, sans-serif]TIA[/font]

If it's a first time sale then it is very likely that VAT will be payable but, unless it has been raised with you in advance, I would expect that the price you have agreed is the VAT inclusive price. The funny thing os that a property like that is potentially of greater interest to a landlord but this is often unrecognised.

theronca

Thanks Marcus, that is very helpful.  It is a first time sale, we are almost sure.  We imagined that this is how it should work but have read so many  horror stories, was second guessing ourselves. 
Why would it be of greater interest to a landlord (just curious?)

Fol20

Marcusm wrote: »

If it's a first time sale then it is very likely that VAT will be payable but, unless it has been raised with you in advance, I would expect that the price you have agreed is the VAT inclusive price. The funny thing os that a property like that is potentially of greater interest to a landlord but this is often unrecognised.

Hi Marcusm, just out of curiosity why would it be more of interest to a ll?

Spark Plug

If the property has been let out continuously for 2yrs post completion the VAT issue falls away

Fkall

Are you sure?

Lockedout2

Spark Plug wrote: »

If the property has been let out continuously for 2yrs post completion the VAT issue falls away

If it’s the first sale of residential property by the developer then it’s VATable.

Your offer will be deemed to include VAT I’d imagine.

theronca

Yes, it is the first sale.  Thanks for the input.  My worry was that the seller might include a "joint option to tax" in the contract.  So I hope you are right.  Otherwise we'll have wasted quite few months on the property.

Marcusm

Fol20 wrote: »

Hi Marcusm, just out of curiosity why would it be more of interest to a ll?

It may be limited now if designed for residential letting but in the past on a new build the landlord would recover the VAT upfront (effectively reducing the purchase price) in return for charging VAT on the passing rent.

Fol20

Marcusm wrote: »

It may be limited now if designed for residential letting but in the past on a new build the landlord would recover the VAT upfront (effectively reducing the purchase price) in return for charging VAT on the passing rent.

Ah I get you. Long term if you didn’t intend on selling. It would cost you more then no?