VAT on "New Build"

[Donegal]

Hi,

First time poster - are you able to help please
We agreed a price with a builder for a half-built house plus - that he agreed to finish for the final price. However, he then went bankrupt and the bank took posession of the house before he finished it. We then purhcaseed it from the bank for a reduced price.
We have got our own builder to complete the "builders finish" plus tiling etc...- is this still zero-rated as it is still a new build - so do we have to pay vat on the 40k we have put into the house to finish it?
Thanks for your help folks
James

[saharwood]

Hi James,

Only the 'first grant' of a property qualifies for Zero rating, and thereafter residential property is Exempt of VAT (for sales, leases).

When you say 'half built', if the property was substantially completed and habitable then there probably has been the first grant already made and the builder is thereafter supply building works to an existing residential property (standard rated). I take this view as you later state 'builders finish' was the only work later required (implying the house was pretty much fully constructed)?

Regards

Scott Harwood

[Donegal]

Thanks for your reply Scott
When we finally purchased the house, it required plastering, plumbing electrics to get it passed by Building Control - therefore it was not habitable - we are now quoted 20k to get it up to being passed by building control and therefore livable?
Would appreciate your thoughts?
James

[Generix]

Thanks for your reply Scott
When we finally purchased the house, it required plastering, plumbing electrics to get it passed by Building Control - therefore it was not habitable - we are now quoted 20k to get it up to being passed by building control and therefore livable?
Would appreciate your thoughts?
James

Not an expert on this particular definition, but I'd be surprised that if you can't move in because of government red tape...I mean H&S regs etc, then I doubt it can be 'complete' for VAT purposes.

[Superchimp]

Agree with Generix.

The building work is not normally deemed to be completed until the certificate of completion has been issued in respect of the new dwelling. As such, any construction services provided prior to this time should be eligible for zero rating, subject to the normal conditions.