Value Added Tax, or VAT as it’s more commonly known, is a tax on the value added to a product or service. As a property purchaser, you have the option to tax a property or can elect to waive exemption of VAT on a property. Transactions that may involve selling or leasing of land are not always exempt, but if a business decides to charge VAT (opts to tax), this will change. The business will go from being exempt to charging VAT. This then means that the business can recover its VAT costs on construction.
So electing to waive exemption of VAT on commercial property will, mean that:
Should a landlord choose not to waive exemption of property VAT this will have the following consequences:
Once a property has been elected to waive exemption of VAT the property will remain elected for 20 years.
Please be aware that SDLT is applicable on the total purchase price + VAT of a property, and the VAT on SDLT cannot be reclaimed.
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"DeVono provided E.ON Ruhrgas with excellent support, guidance and valuable industry knowledge during the search for our new office location. Their service provided our Management Team with an extensive list of the options available both on and off the market so that we felt an informed decision could be made on our move. It is evident that DeVono is a dynamic company, who put the interests of the tenants as their sole priority in the London commercial office market place."
"Our second time using DeVono and again I was very impressed with the team - friendly, efficient and extremely commercial and honest. They understood the brief and worked hard to deliver the right property for our needs. In what was an unfamiliar area to me, they provided guidance on key issues and negotiated very good terms, highly recommendable."
"We have used DeVono as our property advisers for a number of years. Their greatest strengths lie in their ability to understand quickly what is required and to grasp all the relevant issues. They regularly ‘think outside the box’ and offer creative solutions to complex problems. We have no hesitation in recommending them."
"We’ve worked with DeVono for several years through various stages of our evolution. We’ve had to meet the challenges of COVID-19 head on including adjusting our real estate strategy. To understand our options, and how best to progress we turned once again to DeVono. They were always there, ready to guide us to ensure we got the best outcome for the business."
"DeVono did an excellent job for On Demand from beginning to end. You showed patience as our requirements changed and understood what we looking for at each stage of the process. I would be very happy to recommend your services to other clients and would single out the first class service provided by your relocation team for particular praise."
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