# can you claim VAT back on a self-build house?



## carefree (4 Jun 2007)

Just wondering if anyone knew the rules on claiming back any VAT on self-build projects and if builders are supposed to charge you VAT on materials and labour?
In the UK if you get a contract builder to complete the whole project you can claim all the VAT back at 17.5% of project. 
I know its a longshot but hey...........


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## Nige (5 Jun 2007)

No you can't.


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## Madilla (5 Jun 2007)

I know the rules changed re reclaiming VAT on a buy to let but whats the story on a self build for an investor who registers for VAT


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## ubiquitous (5 Jun 2007)

Madilla said:


> whats the story on a self build for an investor who registers for VAT



as above.

VAT is a (very lucrative) tax collection system. It is not a mechanism to subsidise self-builders or anyone else.


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## woods (5 Jun 2007)

I would think that if it is a business and the property is going to be part of the business and the business is registered for VAT then you can claim it back.
The down side is that you then have to pay VAT on the rental (or sale) of the property for ever and ever and this should end up being more than you claimed back.


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## Graham_07 (6 Jun 2007)

woods said:


> I would think that if it is a business and the property is going to be part of the business and the business is registered for VAT then you can claim it back.
> The down side is that you then have to pay VAT on the rental (or sale) of the property for ever and ever and this should end up being more than you claimed back.


 
If the business is that of building houses then one is also into Income tax on profits, not CGT.


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## Madilla (6 Jun 2007)

I do understand the income tax and VAT on rent liabilities but was wondering about the details of the rule changes in relation to investors reclaiming VAT on properties. This is a useful interest free loan from the revenue which is repaid by accounting for VAT on rent receipts. I then believe it is possible to deregister when the VAT reclaimed on the build equals the VAT charged and paid on rent.


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## ubiquitous (6 Jun 2007)

Madilla said:


> ...in relation to investors reclaiming VAT on properties. This is a useful interest free loan from the revenue which is repaid by accounting for VAT on rent receipts. I then believe it is possible to deregister when the VAT reclaimed on the build equals the VAT charged and paid on rent.



This scheme is now abolished and it is no longer possible to avail of it.


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## Madilla (6 Jun 2007)

I had registered for VAT and recalimed some VAT before that but have not yet actually started the build am I still unable to avail of this?


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## ubiquitous (6 Jun 2007)

Madilla said:


> I had registered for VAT and recalimed some VAT before that but have not yet actually started the build am I still unable to avail of this?



How exactly did you register? By waiving VAT exemption on short term lettings? Or, by normal self-employment VAT registration as a builder/developer?


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## Madilla (6 Jun 2007)

Registered as normal self employed and stated type of business was self build of property.


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## Nige (6 Jun 2007)

Madilla said:


> Registered as normal self employed and stated type of business was self build of property.


 
If you are building to sell on, you can register for (and reclaim) VAT.

If you building to keep yourself or for short term residential lettings (less than 10 year lease) then you are not entitled to reclaim VAT.


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