Property conversion

15 October 2013

Issue: 4424 / Categories: Forum & Feedback , VAT

A company bought a property that was originally a commercial building, but which was being converted to residential use. After the work is completed the new properties will be sold, but what are the VAT implications?

Our client company has bought a property that in its original form was a commercial building. However when the company bought it some work to convert the property into flats and a house had already been started. Unfortunately although work had been started the previous owner had not been able to afford to finish it.

Our client intends to complete the works – at a cost of about £150 000 – and finish off the residential properties. The plans remain the same so there will be no change to the number of dwellings originally planned.

When our clients purchased the property VAT was not added to the price. We are not sure of the basis for this or indeed whether that would have been correct. When converted the company plans to sell each apartment/house to individual residents.

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Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.