VAT Rebate on Self Build Houses

samjdarby@yahoo.com · Postby **samjdarby@yahoo.com** » Mon Jan 19, 2004 12:10 pm

Hello

My b/f is building his first self build home. We are planning on living in the house, maybe for a while as I am pregnant with our first baby.

We wanted to claim all our VAT back paid for the materials used whilst making the house. I think that we may have to live in the property for a while before we can claim this back - is there a set amount of time we have to live in the house before we can claim the VAT back? Or if we keep the property but rent it out, could we still claim our VAT back, and would we stil have to live in the property for a certain time period before we rented it???

We are thinking of looking for more land to start another project in the near future/ or perhaps an old property for renovation. Are there a set amount of houses we can build and claim our VAT back? And can we claim any taxes back on renovation projects?

Any help would be greatly appreciated.
Thanks
Sam

samjdarby@yahoo.com · Postby **samjdarby@yahoo.com** » Mon Jan 19, 2004 12:42 pm

.....And will we have to pay any CGT on sale of the property? Also if we letted for a while, would this affect our capital gains???

Sorry for the million questions but we're new to this.

Thanks
Sam

Ian McTernan CTA · Postby **Ian McTernan CTA** » Mon Jan 19, 2004 1:06 pm

You need to seek professional advice. You are thinking of becoming property developers and need to run through all this entails.

Your intentions on the self build are ambiguous to say the least- rent, live in, sell immediately? Intention is very important in this sort of case and you need to discuss this fully with a professional.

If you don't take advice now, you could be facing a very large tax bill one day!

Ian McTernan CTA
McTernan Associates Ltd
Chartered Tax Advisers
ian@imcternan.com

paultaylor@vatease.c · Postby **paultaylor@vatease.c** » Tue Jan 20, 2004 3:55 am

If you are building the property for a non-business purpose (i.e. to live in as your home) then you may be able to recover VAT via the DIY builders scheme. A claim under this scheme must be submitted before 3 months after completion.

If you are building the house to sell then you should register for VAT. The sale will be zero-rated and most VAT on the associated building costs can be reclaimed.

If you are building the house to rent the rent will be exempt. You will not be entitled to register and will not be able to reclaim back any VAT on purchases.

The above is only the most basic of guides. I would agree with Ian and encourage you to seek professional assistance.

Regards
Paul Taylor
0121 778 4299
http://www.vatease.co.uk/