Vat on rent

[wollbird]

I built a commercial property 6 years ago and reclaimed the Vat. I now charge Vat on rent to the tenant. Anybody know how long I must continue to do this ? or if it can be avoided

cheers

 

[smeharg]

VAT on property is notoriously complex. In addition the rules changed since in 2008.

You should specialist specialist professional advice.

Assuming that it is a lease of less than 10 years and there is a waiver of exemption in place, the general rule is that if the VAT charged on rents exceeds the amount reclaimed on purchase then there is no clawback. On the other hand if the VAT reclaimed on purchase exceeds that charged on rents then a repayment to Revenue will arise.

There are complications to this general rule though depending of circumstances.

 

[Madilla]

Removed as earlier reply covered.