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Joint option to tax sale

  • 27-07-2020 3:40pm
    #1
    94shane
    Registered Users, Registered Users 2 Posts: 14 ✭


    Hi,

    I was keeping track of a property that is due to go to auction. The property has been in receivership.

    The VAT section has been changed & now they want the joint option to tax the sale. As far as I can see they don't have the VAT history of the property & this avoids any possible liability.

    Does this mean that VAT of 13.5% will be added to the sale price? Any other consequences? I have asked a solicitor for his advice but just wondering if anyone has experience of this.


Comments

  • #2
    thegolfer
    Registered Users, Registered Users 2 Posts: 346 ✭✭thegolfer


    94shane wrote: »
    Hi,

    I was keeping track of a property that is due to go to auction. The property has been in receivership.

    The VAT section has been changed & now they want the joint option to tax the sale. As far as I can see they don't have the VAT history of the property & this avoids any possible liability.

    Does this mean that VAT of 13.5% will be added to the sale price? Any other consequences? I have asked a solicitor for his advice but just wondering if anyone has experience of this.

    Straight forward, you account for VAT on the purchase of the property, if you are VAT registered you can claim the vat based on the property use.


  • #3
    94shane
    Registered Users, Registered Users 2 Posts: 14 ✭94shane


    thegolfer wrote: »
    Straight forward, you account for VAT on the purchase of the property, if you are VAT registered you can claim the vat based on the property use.

    Ok - I'm not registered for vat & I don't mind paying it on the purchase price. My only worry was if there was an outstanding liability on the property from a previous owner - would I be liable for that balance also? Just wondering if anyone has come across anything similar - hopefully my solicitor can shed some light on it. Thanks.


  • #4
    thegolfer
    Registered Users, Registered Users 2 Posts: 346 ✭✭thegolfer


    94shane wrote: »
    Ok - I'm not registered for vat & I don't mind paying it on the purchase price. My only worry was if there was an outstanding liability on the property from a previous owner - would I be liable for that balance also? Just wondering if anyone has come across anything similar - hopefully my solicitor can shed some light on it. Thanks.

    VAT on property is very complex, speak to a professional.

    There will be no liability on the acquisition attaching to you. You pay the VAT on the purchase only.

    I assume it's a house, thus residential, and will be taken out of the VAT if you rent it. No VAT on rents to residential property tenant's.

    A solicitor will not know, the tax treatment, and will tell you to get separate tax advise.

    Reason for the Joint Option To Tax is the possiblity being that the house is the first time it was sold, is it was a second hand property then the treatment might have been different.


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