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12 February 2013
A public house, which has a flat on the first floor, has been purchased without VAT and is to be converted into a large house
I have a client who is seeking to buy the freehold of a former pub (he will be buying it as an empty property but without VAT charged on the purchase price) which contains a first-floor self-contained flat that has always been used by the landlord as his living quarters.
The pub trading has always taken place on the ground floor. My client is converting the entire premises into one big house which will be sold on a freehold basis hopefully for a good profit. My queries relate to VAT as follows.
- Will the services of a builder converting the property into the house qualify for the 5% rate of VAT on the basis that most of the property was previously used for a non-residential purpose?
- Will the final sale of the property by my client be zero-rated...
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