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Where Taxpayers and Advisers Meet

VAT on land for holiday homes

IrAl
Posts:1
Joined:Wed Mar 10, 2021 5:34 pm
VAT on land for holiday homes

Postby IrAl » Wed Mar 10, 2021 5:48 pm

Hi.

I own some building sites with full p.p. for holiday homes.
I intend to sell these to end users, who will build their own homes.

Q,
1. If I sell such a building site, is the sale of the land subject to VAT?
2. I understand that self-builders of residential homes have a one-time opportunity to reclaim vat. Does this also apply to building a holiday home? (These are designed in compliance with building control regulations, if that makes any difference.)

I am not a business and I am not vat registered.

Thanks.

Trevor S
Posts:108
Joined:Tue Jan 01, 2019 12:37 am

Re: VAT on land for holiday homes

Postby Trevor S » Wed Mar 10, 2021 11:43 pm

Your land sale would be exempt from VAT. The fact that you're selling with the benefit of planning permission doesn't impact on the VAT treatment.

Regarding your buyers' VAT position, HMRC's guidance regarding VAT recovery on DIY new builds is here: https://www.gov.uk/vat-building-new-home/eligibility

The conditions listed are:
The home must:
  • be separate and self-contained
  • be for you or your family to live or holiday in
  • not be for business purposes (you can use one room as a work from home office)

So if the purchaser is building a holiday home purely for their own use, recovery should be possible - but if they were going to let it out, VAT would be not be recoverable in this way. However (as holiday letting income is subject to VAT) if they were registered for VAT, they could still recover the VAT through their VAT return.

But I would suggest that your buyers' should be seeking their own VAT advice, based on their individual circumstances.


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