VAT for Extension to Parents house

Million_Dollar · Postby **Million_Dollar** » Thu Sep 09, 2004 3:29 am

I am wanting to build a self contained flat above my mums house (I own 16% of the house.

We have permission etc.. The builder has now sent us his last figure, stating that the figure is exclusive of VAT. We are surprised becuase we thought the figure he gave was inc. vat. Anyway he was unsure whether this would come under a new build or not, and whether the VAT was exempt.

Anyone can advise?

paultaylor@vatease.c · Postby **paultaylor@vatease.c** » Thu Sep 16, 2004 1:13 am

Provided no (or at least a minimal) part of the new dwelling utilises part of the existing dwelling then a completely self contained dwelling would be viewed as a new build. The construction services bought in would be zero-rated.

If the new dwelling uses part of the old dwelling (for example by converting existing attic space) then it is not a new build. The works should only attract VAT at 5% though provided the new dwelling is completely self contained.

To be completely self contained, the property must not be prevented from being sold separately to the main house under the terms of the planning permission.

Regards

Paul Taylor
http://www.vatease.co.uk/